Colored Diamond Engagement Ring Trends - Investing in Your Future Together

Becoming engaged to be married is a unique, once in a lifetime moment. And just as you didn’t settle for second best when selecting your fiancé, neither should you settle for second best when selecting their engagement ring. After all, what is the first thing that your fiancé will be flaunting once she announces her new status to the world, none other than that rock on her finger?

 

A beautiful and extremely rare 4.17 Carat, Fancy Orangy Pink Diamond Oval Halo Engagement Ring

 

Just as your fiancé is peerless, every natural fancy color diamond is an exclusive example of the beauty nature has to offer. 10,000 times rarer than colorless diamonds, a fancy color diamond engagement ring is compelling proof of someone who thinks outside the box and goes that extra yard in pleasing their life partner. Whether it is in the form of a complete ring or the presentation of the colored stone with the setting to be completed at a later date, rest assured that a fancy color diamond will definitely start your future together in the best possible way.

 

Colored vs. Colorless Diamonds - Comparative Performance

 

However, even though an engagement is a time when your heart should rule, it doesn’t mean that you should lose all sense of thought. Not only is a color diamond engagement ring a magnificent symbol of your love, it is also an excellent investment, especially when compared to colorless diamonds. For example, whereas .5 carat colorless diamond appreciated just 10% over the last decade, a .5 carat Fancy Intense Argyle pink diamond appreciated 375% - not bad when compared to any benchmark.

 

A supreme and extremely rare GIA certified 1.68-carat, Fancy Vivid Purplish Pink Radiant diamond

The Leibish Prosperity Pink Diamond Ring


 

Although the most prized examples of fancy color diamonds run in to the hundreds of thousands of dollars per carat, which makes them the preserve of only the wealthiest people, there are examples to suit almost every budget that are not only beautiful but also a sound investment proposition. Just as a rising tide lifts all boats, the strength in the rarest of diamond colors has trickled down to the less rare colors as more people become aware of the allure and potential return of color diamonds and want to participate in this still relatively unknown asset class.

 

Finding Your Perfect Colored Diamond

 

When embarking on your journey to find the perfect diamond/investment, the first thing you must ascertain is your budget. Following that, educate yourself, just as you would with any other investment, by reading as much as you can about fancy color diamonds – knowledge is power. Then, and perhaps most importantly, find a diamond dealer who you can trust; one who specializes in fancy color diamonds. Like finding a reputable stockbroker, a trustworthy diamond dealer is worth their weight in…diamonds.

 

The amazing 5.41 Carat, Fancy Light Yellow, Radiant-shaped set with 88 D-E VVS melee diamonds

 

 

Investment Performance

 

The prices of all fancy color diamonds have increased over the last few decades with those of the rarer colors showing not only outperformance vis-à-vis colorless diamonds but also against virtually every other investment class. Whether it be equities, bonds, property, or precious metals, the best fancy color diamonds have weathered the economic downturn better than any other investment and have been a haven from depreciating prices.

 

And their price appreciation has been steady and spectacular. For example, between 2003-2011 the price of a Fancy Intense pink diamond between 3.5-5 carats appreciated by 443%. The same 3.17 carat Fancy Intense blue diamond sold in 2006 for USD1 million and in 2011 for USD2.3 million – a 130% price increase in only 5 years, or 26% annualized.

 

Following are a few auction results that further illustrate the investment potential of fancy color diamonds:

 

  • In 1995, a 1.59 carat Fancy Intense purplish pink diamond sold for USD10,000/carat. In 2007, a 1.59 carat Fancy Intense pink sold for USD100,000/carat. A 1000% increase in 12 years or 83% annualized.

 

  • In 1998, a 1.97 carat Fancy Intense pink sold for USD69,000/carat. In 2002, a 2.04 carat Fancy Intense purplish pink sold for USD95,000/carat. A 37.7% increase in 4 years or almost 9.5% annualized - not too shabby. However, when you consider a little footnote in history called the “Tech Wreck” that occurred in 2000/2001, this return is pretty amazing. In 2005, a 2.05 carat Fancy Intense pink sold for USD125,000/carat for a 68% price rise in 7 years.

 

  • In 2002, a 2.18 carat Fancy Intense blue sold for USD180,000/carat. In 2007, a 1.59 carat Fancy Intense blue sold for USD400,000/carat. A 122% increase in 5 years or 24.5% annualized.

 

  • Fancy Intense blues above 5 carats didn’t perform too badly either. In 1998, a 5.32 carat Fancy Intense blue sold for USD285,000/carat. In 2010, a 7.04 carat Fancy Intense blue sold for USD1,050,000/carat – a new world record and a 19% annualized return.

 

  • And the piece de resistance, in 2006 a 3.17 carat Fancy Intense blue sold for USD320,000/carat. The exact same stone sold in 2011 for USD755,000/carat for a 110% return in 5 years.

 

By now it should be clear that history has shown that strong, steady, consistent returns are a feature of fancy color diamond investment.

 

A Diamond Tipped Bow

 

Valentine’s Day is almost upon us and, as is always the case, Cupid will be working his magic. Should it be your intention to ask your partner for their hand in marriage on this traditional day (or any other), rest assured that neither you nor they will be disappointed with the sparkle of a fancy color diamond when on bended knee. Perhaps that’s what they referred to when the phrase “investing in your marriage” was coined.

 

Contributor: Benji Margolese

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