Diamonds as a store of value

Posted in: General | Posted on: Mon, 04 Jul 2022

Inflation is rising in many countries, reaching a 30-year high in New Zealand in the first quarter of 2022.

As a consequence, investors are seeking stores of value, e.g., physical assets and commodities.

When thinking about stores of value, assets such as gold bullion typically come to mind, however, due to their rarity, coloured diamonds are also good potential stores of value.

Indeed, Australian self-managed superannuation funds allow diamonds to be included as part of superannuation portfolios.

Argyle pink diamonds are worth considering as stores of value and even potential investments, given that 90% of the global pink diamond supply was sourced from the Argyle mine in Western Australia, which ceased operations in November 2020.

According to the Fancy Color Research Foundation, the closure of the Argyle mine has caused the global supply of Australian pink diamonds to fall by 90-95%.

Argyle pink diamonds have achieved strong price growth of over 11% per year since 2005 — outperforming many other assets including gold, silver, shares, and real estate, and given the closure of the Argyle mine, demand is likely to outstrip supply over the coming years.

Aside from coloured diamonds, Bank of America expects the price of diamonds to rise by 15% in 2022.

At diamonds.co.nz, we are experts in loose diamonds and natural coloured diamonds, having been diamond merchants since 1984.

If you are considering diversifying the asset classes in your investment portfolio and would like assistance in sourcing and/or storage (vaulting), please get in touch with us.

info@diamonds.co.nz

Disclaimer: The above is not intended to be financial advice. Please do your own research and due diligence before making any investment decisions.