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Carats Diamonds—Becoming a World Leader in Colored Diamond Investment
Overview
Carats is an international diamond brokerage firm based in Vancouver, BC, specializing in engagement and investment-grade diamonds. Since 1989 the company has built its business on delivering exceptional service and the finest quality diamonds at the best prices. Carats brokers have well-established connections across the global diamond markets as well as direct access to mines and cutters including in South Africa, Australia, Canada and Russia. In line with its mission to become a major global diamond supplier, Carats expanded into the Southeast Asian market in 2015.
Carats diamond brokers have a strong reputation for providing highly knowledgeable client education and guidance from “engagement to investment.” Carats is a 16-year member of the Better Business Bureau, which has recognized the company’s commitment to quality customer service and education by awarding Carats its highest rating each year.
As Canada’s first direct distributor from the world-class Argyle diamond mine, Carats has the top collection of natural fancy colored diamonds in the nation—including rare pink diamonds and the popular champagne colored diamonds. In 2017, Carats will be launching its natural fancy colored diamonds exchange to give its clients wider access to the fastest grown hard asset class in the world.
Investment Highlights
- The world’s fastest growing hard asset class.
- Considered currency all over the world.
- The most concentrated form of wealth on the planet – nothing is smaller and more valuable.
- Stealth Wealth: Countries around the world do not require the disclosure of colored diamond investment to government authorities.
- Have significantly increased in value over the past few years.
- Expected to continue to appreciate in value on rising demand and falling supply.
Why Natural Fancy Colored Diamonds?
The term “fancy” describes the depth of color in a stone with a “fancy vivid” having the richest hue. Natural fancy colored diamonds exist in a wide range of colors from the faintest shade of pastel pink to vivid blue, from light yellow to deep brown and even shades of green or orange.
Image courtesy of Carats Diamonds
Image courtesy of Carats Diamonds
Real-estate in your pocket
Not only do they help to create some of the world’s most beautiful and sought after jewelry pieces, but natural fancy colored diamonds offer a lucrative and secure way to diversify your investment portfolio. For investors looking for a safe haven from the volatility inherent in today’s equity investments natural colored diamonds could be the answer. Easily portable, colored diamonds are “real-estate in your pocket,” says Colin Ferguson, Carats Founder and CEO.
“One of the things about this investment is that there is no price volatility,” explains Ferguson. “Colored diamonds have never gone down in value and certainly today —with the challenging economic environment and the closing of major mines—have never been poised to appreciate more.”
Staggering value appreciation
Growing demand for colored diamonds has translated into impressive price gains for fancy colored diamonds. “Fancy colored diamonds are probably more important today than ever before,” Graeme Thompson, Director of Jewellery, Bonhams Asia stated at a recent Hong Kong press event.
The colored diamonds category on the Knight Frank Luxury Index, according to Barron’s, has risen 142 percent in the past ten years. “What was then $100,000 or $200,000 per carat can now easily be worth $1.7 to $1.8 to $2 million per carat,” stated the Head of Jewelry for Christie’s Americas and Switzerland, Rahul Kadakia in a press release.
The colored diamonds witnessing the most growth include pink diamonds (up 315 percent this past decade), and blue diamonds (up 154 percent), according to the Fancy Color Research Foundation.
Economics of Rarity
“Diamonds have the best fundamentals… the gap between supply and demand is much greater than other commodities.” – Merril Lynch Wealth Management
Interestingly, a major driver of the demand for colored demands is the rarity of the stones themselves. According to the Gemological Institute of America (GIA), only about 0.01 percent of the diamonds mined annually around the world are natural fancy colored diamonds. The rarest of these are the pink diamonds—representing only 0.1 percent of the supply of colored diamonds.
As is usually the case for luxury goods, the price of colored diamonds is driven by the economics of rarity, or scarcity value. And with the world’s major producing mines coming to the end of their mine life and no new tier one diamond mines discovered that value is expected to rise further.
Brown colored diamonds have the most upside
Although colored diamonds in brown shades are on trend with the celebrity circuit, prices remain below white diamonds—in fact, this is the only type of colored diamond that has yet to eclipse white diamonds in price. But that eclipse is coming the closer we get to 2020.
Image courtesy of Carats Diamonds
“Whatever color diamond you invest in today is going up in value,” states Ferguson. “At Carats, we focus on those with the greatest potential for appreciation. We are very bullish on the brown diamonds—what are now called champagne, cognac or chocolate. These are the stones with the greatest potential for the biggest returns.”
Image courtesy of Carats Diamonds
The Argyle Mine in Western Australia represents 90 percent of global pink diamond production as well as the majority of champagne, cognac and chocolate diamonds. Rio Tinto is expected to close the mine in early 2020. The closure of this key diamond mine is expected to have an enormous impact on colored diamond prices.
Easy Liquidation
In 2017, Carats will be launching the Natural Fancy Diamond Exchange website (nfcde.com) which will be a platform for investors to trade their colored diamonds investments. The site will open to the public for trading the day the Argyle mine closes in 2020.
Image courtesy of Carats Diamonds