It has been a while since I last talked about investment diamonds. There have been some interesting new developments in the diamond industry, which I would like to discuss.
More diamond companies are choosing to comply with FCA regulations, according to Diamonds.Net. This means dealing with cash less (hence adhering to anti-money laundering laws) and making financial reports which are up to IFRS accounting standards.
However, these are only the first steps which would gradually lead to diamonds being more respected as investments. There’s still the problem of a lack of liquidity with coloured diamonds as investments but they have proven to have had higher price rises than colourless diamonds.
Unfortunately, there’s no real solution to this problem. Diamonds are not standardised enough to allow a long presence in the futures markets, and all the current attempts have ended in failure. However, there is a light in the end of the tunnel. Custom-made structured products which are tied to investment diamonds, are possible and with investment diamonds gradually gaining status as an investment, I believe diamond companies would start to offer this sort of investment in the nearest future.
It may not solve the liquidity problem but diamonds were never meant to be a part of futures markets.
Enver Nigmatulin
A good amount of investment-grade diamonds exist. It is very difficult to find them, though, as diamonds lack fungibility and typically the choice of investment would boil down to either spending a lot of time trying to find the best investment-grade diamond on your own and get a higher annual return, or go to more standardised assets (like oil and gold) which give a lower annual return.
Companies like ECN Investments however, are putting a third option into the mix - to find the investment-grade diamond so you don’t have to, allowing you to profit from the higher annual returns in diamonds.
]]>Since I became a business analyst at a diamond dealer, I have not only learned about the diamond market but also came across some misconceptions which try to convince people that diamonds are not a good investment.
Over the next few blog posts, I will reveal what is fact and what is fiction about diamonds as an investment.
1). “Diamonds are not a good investment because you cannot sell diamonds for a return.” Myth
This statement assumes that you bought the diamond at an overly inflated price and when it comes to selling it, you get far less than what you initially paid for it. In that case, you wouldn’t get a good return, if any, no matter if you sell it to the diamond trade, in auctions or through private people.
Companies like ECN Investments, sell investment diamonds at almost wholesale prices which negates the problem of over-inflation.
Enver Nigmatulin
The razor thin profit margins of the jewellery industry would be eroded if diamond investment would be available for the mass market, and standardisation still remains an issue because you would have less choice in what stones you can invest in. A basket of low-quality colourless diamonds will never equal an investment into the underlying asset, which would have a higher expected return.
Although diamond investment is not destined for the fast-moving derivatives markets, it doesn’t mean that investment into diamonds should be difficult. ECN Investments can help with the entire investment process from start to finish, and even help with reselling the investment diamond at competitive prices. Contact us today to see how we can help.
]]>I enjoyed my time as a student. The parties. The social events. Oh, and debating financial models.
I remember my first lecture in financial investments. “We try and model the world because there are too many variables...” led to “Let’s assume that everyone’s the same, culture doesn’t exist and conflict is a figment in your imagination”. I thought, if you have to jump through hoops to even estimate a financial return of a bond or stock, then maybe they’re not such great investments after all?
Fast forward to Brexit. The sun was shining. The birds were singing. And the pound fell faster than a drop of a hat. “Not surprised,” I mumbled, “Everything’s falling now”. Except diamonds.
Yes, the diamond seems like the fortified steel building in a field of wooden houses. The wooden houses have been rebuilt after many disasters while the steel building just needed a few touch-ups every now and then. I’ve been watching this happen for a long time already - too long, in fact.
If you’re tired of being let down by your wooden house collapsing again, you’ve come to the right place.
Enver Nigmatulin
My customers are often asking me some questions about the certificates for diamonds. And I will explain briefly what certificates we use in our trade.
GIA certificates - those certificates are issued after careful inspection and checks of your diamond in the GIA Laboratory. GIA stands for Gemological Insitute of America, and the Headquarters of GIA are in Carlsbad, California, United States of America. GIA certificates are sought after by many.
We also trade with diamonds certified by:
- IGI
- HRD
- ANCHOR
- EDR
- EGL
and many others.
As a GIA professional, I would like to speak, by using the example of GIA certificates, about these documents and I would like y customers to be more comfortable with reading the certificates.
There are GIA reports and a GIA diamond dossier. The GIA dossier has the full specification of the diamond but without a plotted diagram. I would say that the dossier is a smaller version of the certificate but more compact. Also, the dossier is available for diamonds that weigh between 0.15ct to 1.99ct. The GIA report has full information, including a plotted diagram of the stone. A laser inscription with the number of the GIA certificate is located on the girdle of the stone.
Also, GIA will soon issue only eReports where you have full information and an image of the diamond in a digital form. From January 2023 there would be digital-only dossiers, by 2025 - other GIA reports.
On the left-hand side of each full report, there is a full specification with the number of the report and the information if there is a laser inscription on the stone. On the right-hand side, there is a plotted diagram of the stone.
]]>Now I will talk about how to choose the perfect jewellery gift.
We all want to chose the gift which will be cherished and which will bring joy to its new owner. But how we can do it? Unless we know the needs of the gift receiver, it could be a nightmare to find a perfect gift.
I have worked in retail over 2 decades, and very often my customers are facing this dilemma.
Now, we can talk about 5 tips:
1. - budget - it is obvious that we need to be sure as how much we can/want to spend on such a gift; there is no need to break the bank to buy the perfect jewellery gift
2. - what the gift receiver does for a living? what is their job? As it might indicate a lot what the gift receiver will wear or what should be avoided
3. - the reason for this gift - Is it an anniversary coming? Lady’s Day? There are loads of options to connect your emotions and the event to the gift
4. - what receiver likes and what receiver hates - for example, one of my clients hates any item with amethyst; and it doesn’t matter how beautiful and appropriate the jewellery item will be, BUT if it contains an amethyst, she will not like it, as the amethyst in this instance represents a negative emotion for this customer
5. - the message you are sending with your gift - you are sending your love/expressing gratitude/wishing prosperity/showing loyalty….. The list is endless.
But of course, that is only part of the battle. You will need to clean your beloved jewellery as well, so it lasts for a long time. See you next time.
Elena Nigmatulina
]]>Also, the colour grade is a range of colour, where the gemologist or trained jewellery professional can compare such range with master stones.
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If we talk about fancy colours, there is an opposite tendency. The more pink in a pink diamond, the more expensive this diamond. The fancy colours come in all shades of the rainbow.