Diamonds

Diamonds

Regardless of whether we are dealing with a colourless or coloured diamond, in order to be considered as an investment object, it has to be unique.

Diamonds

This uniqueness

can be defined on several levels, defined as exceptional 4C parameters (basis), and in fact according to our 8C or 9C scale, as we have described it in the Noble Assets section. These are not only the right size, clarity, colour and cut (the basic 4Cs), but also the parameters of this cut, its type, as well as the fluorescence or brilliance for diamonds of the brilliant cut. Not every diamond is a brilliant and it is not a defect of the diamond, it is simply the type of the cut.

Hearts & Arrows

Few people are aware that for coloured diamonds, not only for the technical side, other cuts are much more effective than the best known round brilliant cut, because the most important thing for coloured diamonds is their effectiveness, the way they reflect and show their colour, its saturation. This can be achieved using other cuts and the effect is much more prominent. Trading and handling of coloured diamonds, as well as investments in such unique assets, is the highest level of ennoblement, reserved only for a selected few. Coloured diamonds, or in other words Fancy Colour Diamonds, comprise 11 main colours in which these diamonds are found, including white (not to be confused with colourless diamonds). Apart from white, 10 colours are distinguished: black, grey, brown, yellow, orange, pink, violet, red, blue and green. Other unique and highly sought-after coloured diamonds are olive and purple diamonds, which are diamonds in derived colours,

characterised by their rarity, which is why there is also a great deal of interest in diamonds in these colours. Fancy colour diamonds are also found in more than 230 other combinations of basic and derived colours and their shades. It is also very important that there are nine levels of colour intensity in colour diamonds, including six appropriate ones (Fancy), which stand out and it is these six levels that we consider and name as investment. Others are not worthy of attention in terms of investment. From these only three levels: Fancy, Fancy Intense and Fancy Vivid can be considered extremely suitable for investment. In the case of some diamonds, it can be the remaining three levels: Fancy Light, Fancy Deep, Fancy Dark. However, diamonds fitting on this scale do not reflect the intensity of the colour so much. Of course, this also affects the price, the possibility of sell or searching for diamonds of particular qualities.

To sum up,

many factors influence the selection process of colourless stones and even more so in the case of coloured diamonds, which as rough stones may be subjected to the process of refining in order to become investment diamonds. It should be noted here that in the case of colourless diamonds, round brilliant cut diamonds are usually considered as investment diamonds. Only by exceptional diamonds, auction diamonds, they can have another shape of cut, but such diamonds are always larger than 10.00 carats.

However, the round cut is a standard, whereas their size may be smaller but not lower than 1.00 carat. Of course, the size, type, quality… the holding time of diamonds determines the increase in their value and profitability, and therefore, for colourless diamonds, it is necessary going by the rule of investing in diamonds above 5.00 carats, with only some of them, specific ones, of very large sizes, are considered to be auction diamonds and desired by jewellery houses as interesting to be used for making exceptional jewellery. With coloured diamonds, many more cuts can be considered as conducive to investment diamonds and their size does not have to exceed 10.00 carat, although diamonds of this size achieve very high prices, see large value increases and are highly sought after due to their small quantity. Coloured diamonds are very rare masterpieces of nature and coloured diamonds with size more than 10.00 carat are entirely unique.

Approximately 120-130 million carats of rough diamonds are extracted worldwide every year on average. Of this number, approximately 50% are stones that are sent for further processing, because they are considered to be diamonds viable for obtaining the final product, that is, a polished gemstone. The remaining diamonds are used for industrial purposes. The result of the refining process is approximately 22 to 27 million carats of refined stones, with investment diamonds accounting for less than 10 % of this volume – approximately 2 million carats per year. Coloured diamonds are also included in this data. Statistically, coloured diamonds make up between 0.10 and 0.15 % of all refined diamonds, so there are only around 30 000 carats of them per year. Of this amount, only every twentieth stone on average is an investment diamond (about 1500 carats).

Only many years of experience, knowledge passed down through generations, adequate skills and cooperation with very unique people from the diamond sector can enable somebody to properly evaluate diamonds with regards to meeting the conditions to be investment diamonds, especially that personally we evaluate this in an highly reliable and ethical way to ensure that clients can exit such an investment with a very high profit. It is the rarity, uniqueness and uniqueness of investment diamonds that make their prices rise systematically. Often, this happens in a way that is completely uncorrelated with the changes taking place in the rest of the sector, such as in the case of jewellery diamonds, where the price is influenced by a large number of factors, including their basic 4C value, but also the market situation, booms and busts in jewellery sales (example of the Chinese market), the geopolitical situation and others. The real revolution in basic valuation of certain diamonds took place in 1978.

At that time, Martin Rapaport, a New York diamond broker, proposed and implemented a stock exchange index (referred to as the Rapaport Report) presenting current transactional prices for un-mounted, polished, colourless diamonds, but even this report does not fully reflect their actual values, because the report does not catalogue different values and parameters, as clearly and undisputedly the correlation of the value of a diamond, its price per carat, to the quality of the cut, its parameters and other values, which we professionally call the 5th, 6th, 7th, 8th and even 9th C regarding brilliant cuts. The report lists the diamond prices once a week, taking into account only the basic parameters of the cut, carat weight, colour, and clarity – 4Cs, the very basics.

The Rapaport Report

does not apply to unique, colourless stones with a size of over 11.00 carats, it does not apply completely to auction diamonds either, and when estimating the value of such diamonds, it can only be used as a minimal reference. Considering the auction sales of some diamonds, one could say that the price for such a diamond simply has no limit, in other words, “the sky is the limit”.

Of course, neither this report nor any other covers the stock market prices for coloured diamonds, since these are a rarity and, because of the negligible quantities, they are usually sold outside the open market. They appear only in the internal circulation of the sector (only the most important diamond and jewellery companies) or are available for purchase via the auction system. To a large extent the same applies to large, exceptional colourless diamonds with sizes of more than 11.00 carats, especially those larger than several dozen carats.

Attention

The term “investment diamonds” is commonly misused. This leads to a whole lot of misunderstandings and misconceptions, and the client, who purchases diamonds, becomes an unaware victim of such practices (faulty cuts, less valuable cuts, unfavourable fluorescence parameters, impurities of the diamond, lack of proper brilliance, etc.) Usually, which can be very strange for potential clients in a given country, this practice is also employed by large and well-known companies operating on the outskirts of the diamond sector, but these are only locally known companies in a given country, where such an offer appears. These companies are not important for the diamond sector at large, for the diamond centres, these are not companies of multi-generational tradition. This offer is also presented by companies from the financial sector that use diamonds to raise capital from the market.

One cannot talk about investing in diamonds or the reliability of such an offer when a potential client encounters advertisements of so-called “diamond shares” worth less than a hundred dollars or an offer to buy physical diamonds or jewellery for a few hundred dollars. Paid advertisements in the media, intrusive marketing, allows these companies to operate in one way and not in another. These days, as the media have to subsist on advertising, it allows the companies to dictate the conditions even to the large publishers, TV stations and even large media and entertainment agencies, because every such client is “worth their weight in gold”, or rather maintaining jobs and positions for the managers, so there is a tacit consent to such actions. These media simply make their forums available in exchange for paid advertising and the company can use them freely for any purposes,

and the content of the advertisement presented, especially in terms of the integrity of the offer, does not interest anybody. There is a rule of specific dependency at play here. Unfortunately, very often, in the end, the masses of scammed clients have to suffer – we are not talking only about advertising diamonds or jewellery here, but simply advertising any investment product, for example gold or other commodities. Examples of such actions and such advertisements can be multiplied. We do not have to advertise. We do not dedicate our offer to the masses, instead we are targeting it to unique individuals. We want to draw your attention to this fact for objective reasons, taking into account the ethics of our conducted business. Numerous negative factors that occur in the public space usually have an impact and can result in a wrongful and bad perception of even the best products and the best projects. This happens for very simple reasons, which we point out among others here. Unfortunately, nobody from us is able to eliminate such factors, we do not want to do so and we cannot take any responsibility for them, but we can point them out, which is what we are doing here. The purchase and subsequent sale of a diamond, if it is to be profitable, is a rather complicated process and an investor left alone has little chance of getting out of this process unscathed.

We are therefore giving you completely different opportunities. We do not want to meet our client just twice – for the first and last time. Client relations are our forte – we base our client relationships on trust, often they grow to become multicultural and multi-generational relationships. We always try to find the best diamond investment model for each client individually, and every time it is well analysed and precisely customised. We never leave our clients on their own, we deal with their diamond sales on their behalf, within the deadline set by them, but we always try to advise what deadline is best, when the sale should happen, and at the very beginning we choose the right merchandise in order to make the process easier for our clients as well as for ourselves, because we participate in this process as well. All diamonds in our offer have certificates of the highest quality. We always abide by, implement and adhere to the principles set by the World Diamond Council, which have been approved by all members of the Kimberley Process Certification Scheme, and thus guarantee that the diamonds offered by us come from legal sources of indisputable origin and that ensure their highest quality.