Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Bella Ideale Diamonds, a company that sells jewellery and provides strategies for diamond investing, claims that certain high quality diamonds exceed investment returns of traditional investments and are second only to gold in price appreciation over the past 10 years.
According to Paul Buchanan, Gemologist, Graduate of the American Institute of Diamond Cutting and President of Bella Ideale, “it’s difficult to find any investments in coloured diamonds that have not consistently appreciated in value over the past 30 years.”
White diamonds, the most common kind, have also done well, but without the appreciation consistency of coloured diamonds, says Buchanan in his article “What Diamonds Appreciate the Fastest?”
Red, blue and pink diamonds are the most expensive and have demonstrated the highest price appreciation of approximately 15% or more annually. In comparison, gold has appreciated at an 18% annual rate for the past 10 years. Larger, higher quality white diamonds in the 3-carat size and larger have produced annual returns of 8% to 11%. The Dow and S&P 500 have achieved less than 3% for the past 10 years.
It is not uncommon to pay $100,000 per carat for an investment quality blue or pink diamond. A lower investment grade 3 carat white diamond will cost approximately $100,000 compared to $300,000 for the same higher quality investment grade diamond. Yellow coloured diamonds with good color saturation have also done well and are much more affordable. Black, brown and smaller white diamonds have limited appreciation potential.
Buchanan recommends to new diamond investors to start building a portfolio with a purchase of a single diamond that will serve as an alternative investment and can be converted into an exceptional piece of jewellery.
“Obviously, a single purchase is contrary to prudent investment management, but at least investors, with competent counsel, are being directed to the best possible diamonds for appreciation, based on purchase price and historical performance,” he adds.
He concludes that best way to determine quality and potential for appreciation in a diamond is to select Gemological Institute of America or American Gem Society Laboratories graded diamonds, as they are graded and certified as to quality, so investors know exactly what they are buying.
