Monaco-based diamond investment expert Alberto Domenico Vitale discusses the complexities and ROI on offer from this always attractive.
At the very least, investing in diamonds enables you to diversify and balance your portfolio. It differentiates itself from other financial instruments such as real estate, immovable and moveable assets, gold and other commodities and isn’t subject to any kind of speculation, ensuring non-taxable and anonymous capital. In my experience, diamonds offer
peace of mind and safety, however, it is important to keep in mind the advice not to exceed the value of your assets by a single investment of 20% or 30%.
Trends & Forecasts
The diamond market holds an almost uniquely positive trend despite changes in the world’s economy. In the last 50 years, the trend has been overwhelmingly positive, the two falls coming in 1975 during the oil crisis and a slight decrease in 2009 (-9%) that immediately recovered in 2010 (+ 22%). Diamonds are mined worldwide (today there are 13 countries, mostly African, producing over 1,000,000 carats per year) with no government influence over its flows and prices. For these reasons, the average price of diamonds has been allowed to grow naturally, increasing tenfold from the 1960s to today.
Every piece of research into diamond values shows an always improving demand and stable production, but 2015 was a very important year in the market when demand really started to outstrip production. A particular characteristic in the data is that increases in value do not follow nor are affected by the fluctuation of currencies. Ultimately, the price of diamonds has maintained a constant pattern of growth. This is for various reasons, but one important factor
is that the diamond market can be considered an oligopoly, due to the presence of a limited number of large sellers. By contrast, the gold price has less predictable trends. If we add the low volatility of the diamond and the ease of transport and resale, it is undoubtedly an investment safe-haven par excellence.
Market Prices & Investor Peace of Mind
ToTo determine the market price, consideration is usually only given to three of the 4Cs: Carat, Colour and Clarity. It is then up to the expert gemologist to consider the fourth 4 C, the Cut. At VITALE 1913 we believe two other ‘Cs’ are vital: Certification and Customisation.
We understand that one of the main concerns investors have is certification, which acts as the only guarantee of a diamond’s authenticity. Furthermore, we found that many jewellers did not have the required knowledge to buy and sell the type of diamonds which make the most interesting investments. Our strategy has therefore added the fifth ‘C’, Certification, to all investment considerations, along with the Customisation of the stone.
It is essential these parameters are considered together. Often prices are evaluated only on the basis of the weight, the purity and the colour. The biggest mistake is to overlook the quality of the cut and not only the type of cut. A round or brilliant cut can be of various quality and so low reflect light better or worse. This can modify pricing by up to 20%.
Our added-value lies in the interpretation of the certificate and the translation of the value of the proposed diamond. The certificates that we offer are exclusively by recognised bodies: GIA, HRD and IGI. Our dedicated team of expert gemologists have a lifetime of experience in evaluating and determining the right diamond investment for you and ensuring the longevity of your investment is paramount. The Jewellery Safe by VITALE 1913 provides clients with peace-of-mind asset protection and specialised management of their most precious jewels and watches. Every aspect of your jewellery, through the creation, purchase, valuation, storage and after-care is designed with the utmost care. The Jewellery Safe gives you protection designed exclusively for your jewellery by those who understand and value it.
Alberto Domenico Vitale is a multilingual entrepreneur and founder and president of Vitale 1913 in Monaco. Vitale 1913 are distinguished
diamond jewelers and diamond investment experts, renowned for their expertise in creating bespoke jewellery.