When people think of diamonds, many think of the clear stone used in the majority of engagement rings. However, the truth is, diamonds come in a range of colors, from pink to blue to orange, purple and black. These colors appear as a result of trace chemical elements and particulates during the crystallization process of a gem.
Earlier this year, the famed ”Pink Star” diamond sold for $71.2 million at Sotheby’s. In June, a colored diamond lot sold at Christie’s for $1,267,500. And last year, the “Aurora Green” diamond sold for more than $16.8 million. Indeed, recent auctions show that not only is investment interest in fancy colored diamonds growing, but that the value of colored diamonds also continues to rise.
With that said, the thing to remember is that investing in colored diamonds is not something relegated to the rich and ultra-rich. Investing in colored diamonds can be an excellent way for investors of all types to intelligently diversify their portfolios.
But, as we like to caution, before leaping into investing in colored diamonds, it’s important to learn basic facts about diamonds and diamond investing and gradually grow your knowledge from there.
Grading
Color grading is extremely important when it comes to appraising the value of a colored diamond. There are three criteria to color grading. The first criteria is hue, which describes the main color of a diamond and which has a range of 27 different varieties. The second criteria is tone, which refers to how light or dark a diamond’s color is. The third criteria is the saturation of a diamond, which speaks to the strength of the diamond’s color and which has nine categories, from Faint to Fancy Vivid.
Clarity, Cut, and Carats
All diamonds are rated for clarity – colored diamonds are no different. Clarity refers to the presence — or absence — of imperfections in the gemstone. Another physical attribute of a colored diamond is its carat, with carat weight and the price of a diamond being fairly proportionate to each other. Finally, the cut of a colored diamond has an effect on color and carat weight, and therefore, in turn, is a factor in a diamond’s quality and worth.
Initial Investment
It’s recommended that initial investors in colored diamonds decide what they’re willing to invest starting out. That’s in part because the amount one is willing to spend determines the pricing level one can follow and the colors one can invest in. For example, there are relatively common colors of colored diamonds, like brown or fancy yellow, which form a lower tier of investment. Red diamonds, on the other hand, are rarer and therefore, on average, require a greater monetary investment.
If you are interested in fancy colored diamonds and would like to know more, an excellent next step is to get in touch with an expert in the diamond industry who can provide useful, trusted guidance on diamond investment.
About Paragon International Wealth Management: Paragon International Wealth Management is a Toronto-based wealth management firm and a leader in the acquisition of and investment in fancy colored diamonds. Paragon International Wealth Management is committed to advising clients in the area of fancy colored diamond management and dedicated to helping clients create a successful hard asset investment portfolio.
