WHAT MAKES DIAMONDS A VIABLE LONG-TERM INVESTMENT?
In a recent article published in Square Mile Magazine, global diamond expert Ehud Laniado, who has sold two of the three most expensive diamonds sold in the history of Sotheby’s, explains why diamonds are a viable long-term investment.
Laniado, who has sold the dazzling 12.03 carat “Blue Moon” for $4.1 million, says he has noticed that, in the last couple of years, there is “a growing set of wealthy individuals who believe diamonds are worthy investment assets”. However, he says, a great many others “do not yet understand how rare diamonds actually are and how they are priced and this can put them off”.
The difference between the diamond world and the art world – “in which we’ve seen people pay $300 million for a Gauguin and more than $250 million for a Cezanne” – is that art collectors know that they will find a buyer when they want to resell. Once people appreciate the benefits of investing in diamonds, Laniado claims, “The Blue Moon will re-sell for $200 million”.
Diamonds, he says, are “a rare treasure of nature, but more than this, they are rare, which makes them increasingly attractive to investors. According to the Fancy Color Research Foundation, prices for rare yellow, pink and blue diamonds rose 387% between 2005 and 2017”. To illustrate how rare quality gems are, in 2015, 127 million carats of rough diamonds (25,400 kilos) were mined, but only 1.8 million carats of diamonds (356 kilos) were fit as a wealth preservation asset.
Moreover, Laniado claims, “demand for diamonds is predicted to outpace supply in the coming years as many diamond mines reach the end of their lifespans and global mining companies have invested billions of pounds to discover new diamond sources with relatively little success”.
Additionally, Laniado says that the way consumers buy diamonds needs to change. Since buying a diamond at a jewellery store “stands to lose a high proportion of the stone’s re-sale value the second they tap their contactless credit card”, savvy consumers need to buy diamonds direct from reputable manufacturers which they can research online. Laniado also recommends using his Mercury Diamond Price list, “a comprehensive monthly diamond price list online, encompassing thousands of different categories of diamond alongside discounts and premiums based on 500 different irregularities, enabling anyone to buy and sell diamonds at the most accurate market price with confidence”.