Investment in diamonds

Investment diamonds

Investing in diamonds can be a very good business. But it obviously requires insight, experience, timing and the right contacts. Hartmann’s has followed the diamond market for more than 20 years and has a constant finger on the pulse.

Diamonds are not just seductively beautiful. Diamonds have also proven to be a good long-term investment.

— Ulrik Hartmann

View our selection of Loose Diamonds

Why invest in diamonds?

Rising demand and falling supply

Demand for white diamonds is increasing due to considerable demand in the BRIC countries (Brazil, Russia, India and China). And the global market for diamonds will continue to grow – jewellery and engagement rings are no passing fad and have been a staple of social and cultural life for thousands of years. As global financial wealth grows, the need for diamonds will also increase.

Naturally coloured diamonds are extremely rare, as only 1 in every 10,000 carats is naturally coloured, and a vanishingly small percentage of them are pink or blue. Today, clients seek valuables and art that are unique, but that also represent understated luxury.

Very few mines produce the coveted pink and blue diamonds. The Argyle Diamond Mine, which produces 90% of the world’s pink diamonds, is set to close by the end of 2020, which is why prices are expected to rise.

Favourable price trends

Prices for the rare and sought-after pink diamonds are soaring. Since 2005, a 1.00 carat Argyle Vivid Pink diamond has risen in price by 388%, and prices in 2017 alone rose by 15-25%.

A non-volatile commodity

Diamond prices have remained stable for more than 30 years with an upward trend, with the exception of relatively small fluctuations. As such, diamonds have been spared the volatility experienced by precious metals, oil, gas and so on. Diamond prices do not respond in the same way as exchange-traded commodities that, with a decline of 10% due to an economic slowdown, immediately plummet in value by 30-50%.

Financial benefits

The return on an investment in diamonds is tax-free for private individuals if the diamond is embedded in a piece of jewellery.
Investment diamonds are exempt from VAT for private investors if the diamonds are placed in a deposit outside the EU.

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Which diamonds are suitable as investment diamonds?

An investment diamond must be a rare diamond. The rarity may be in terms of size, quality or colour.

Here are Hartmann’s suggestions for typical investment diamonds:

Pink diamonds – particularly Argyle Pink diamonds with high colour intensity
Blue diamonds
Certain diamonds over 3.00 carats
Large diamonds over 5-10 carats of very high quality

View our selection of Loose Diamonds

How much and for how long should I invest?

As a starting point, we recommend that you have a minimum of DKK 100,000 available to invest in order to find a rare, and in the longer term, sought-after diamond. This does not mean that it is not possible to invest less in specific diamonds, such as smaller sizes of Argyle Pink diamonds.

Return and timeframe

In principle, investment in diamonds should be long-term (4-8 years). The return depends on the risk profile, white diamonds versus coloured diamonds and larger diamonds versus smaller sizes.

If you look at a few well-known industry analyses, the following has been true for the past 10 years:

3.00 carat round brilliant cut white diamond

Average increase of 131% from 2005-2015

Source: Rapaport Price Index

5.00 carat round brilliant cut white diamond

Average increase of 94% from 2005-2015

Source: Rapaport Price Index

1.00 carat pink diamond

Average increase of 384% from 2005-2015

Source: The Fancy Color Research Foundation

1.00 carat blue diamond

Average increase of 384% from 2005-2015

Source: The Fancy Color Research Foundation

Only 1 in 10,000 carats is naturally coloured.

— Ulrik Hartmann

Advice

Be extremely selective when choosing to invest in diamonds. The term ‘investment diamond’ is used too often about diamonds that will not provide a significant return.
Consider your budget and time horizon carefully. We recommend investments from minimum DKK 100,000 and a long term investment horizon.
Ask plenty of questions when considering investing in diamonds. Get as many precise and clarifying answers as possible. Inquire about topics or areas that you do not understand or for which you need an in-depth explanation
Make sure that you can see, touch and experience the diamond BEFORE you buy. Never buy diamonds based solely on a picture; colour, clarity and inclusions may vary from photograph to reality.
Always buy an investment diamond with an international certificate from the GIA (Gemological Institute of America), so the diamond can be sold worldwide
Only buy from a supplier you trust and know
Handpicked diamonds that are standout in their category and extremely rare. There will always be customers for the best of the best.

Would you like our advice?

At Hartmann’s, we have more than 20 years of experience in the diamond market, and together we can establish your wishes and expectations to find the right investment for you.

We are in daily contact with the markets, and travel regularly to Antwerp, Hong Kong, New York, Geneva and Australia, maintaining and nurturing a large network that provides insight and expertise right where the action is.

Would you like to know more?

Download Hartmann’s publication, ‘Investing in Diamonds’

Read the catalog online