NCD's VS. Traditional Investments

Investors in today's market are looking for the right opportunities in which to invest with the hope that they will receive abundant returns. Although no one can predict the future, we do have the ability to focus on the solid facts available based on any particular assets past performance and current market demands.

Unfortunately, in this day and age traditionally conservative stocks and bonds no longer yield and produce results that other asset classes can potentially provide. However, some of these more popular alternative investment opportunities are not tangible (physical) and subject to many constraints which make them far less attractive.

The upward trajectory of Natural Fancy coloured Diamond prices over the past few decades has never been interrupted or has been by very minor corrections. Even during the Great Financial Crisis of 2008, Fancy Coloured diamonds outperformed almost every other asset class.

However, the best way for one to objectively quantify which investment opportunities have exhibited the highest returns is to accurately compare them to all other major asset classes in market. Below we will describe which points to focus on in order to present the results of our comparisons.

Since our goal is to bring relevant and accurate data to our clients, we have made sure to focus on the same topics that your everyday investment seeker would investigate. Firstly we have noted what the more "traditional"; options to a common investor would be.

After many comprehensive hours of research, we have managed to collect the ROI statistics and historical price performance for all of these investments such as gold bullion, precious metals, major currencies, U.S. inflation, General Stocks & Bonds, Colourless (White) Diamonds, and of course Natural Fancy Coloured Diamonds.

After analyzing and assessing all of the information that we had acquired, we then continued to compare each investment to one another accurately. To be perfectly honest, we are pleasantly surprised with the results.

Although, Northern Cross Diamonds has been in the trade for a number of years (and already fully understands the investment potential that Natural Coloured Diamonds possess) it was still exciting to see how well they actually performed when compared side by side to the other major asset classes.

As a result of their extreme rarity, Natural Coloured Diamonds are quite different than any other asset in the market, not to mention with many more benefits. However, in order to prove this point accurately we really needed to come as close as possible to a comparison with the other more "traditional"; asset classes to really compare apples to apples.

Coloured Diamonds Compared to Other Assets such as Precious Metals, Stocks, and Currencies

In order to ascertain what the most common investment trends are, as well as to acquire their historical price performance on so called "traditional"; Investment vehicles, one can simply browse through the most popular financial publications and websites. However, none of these sources that we had investigated presented a graph with all of this comprehensive data compared side by side, in an easily understandable format between each investment class.

In the following graph, we present a comparison of these investments which include: Fancy Intense Pink Diamonds 3.00ct and above, Fancy Intense Yellow Diamonds 5.00ct and above, a 1.00ct Colourless (White) Round Diamond, US inflation, Gold, The Dow Jones Industrial Average, Platinum, and Dollars per Euro over a 12 year period since the very beginning of the 21st century (year 2000) through until 2012.

The data to be understood from the graph above concludes as follows:

1. Over the 12 year span, based on auction prices paid for Fancy Intense Pink diamonds larger than 3.00 carats have appreciated in a consistently straight path over a 12 year period, with a 443% gain

  1. In 2003, a 3.58ct Fancy Intense Pink Pear shaped stone was sold at auction for $115,000 per carat
  2. By late 2007, a 3.86ct a very similar Fancy Intense Pink Oval shaped diamond was sold at auction for $390,000 per carat
  3. In late 2010, a 4.59 carat Fancy Intense Pink was sold for an amazing $625,000 per carat

2. Over the same 12 year span (based on in house data) Fancy Intense Yellow diamonds larger than 3.00 carats have appreciated in a consist straight path over a 12 year period, with a 350% gain

Gold and Platinum: Economists in today’s volatile markets are searching for a balanced risk vs. ROI. People prefer tangible investments that help protect against inflation and alternative paper assets. Therefore Hard Asset commodities such as Gold and Platinum have been a successful venture in recent years however are now showing extreme volatility. Furthermore, as a paper commodity it is difficult to move, cannot be concealed, and directly connected to the credit markets and other paper assets like ETFs or other such funds.

Conclusion: Although other assets have also improved during this 12 year period none can remotely compare to the performance of Natural Pink and Yellow Coloured diamonds.

Diamonds to Diamonds: The Appreciation of Coloured vs. Colourless

Almost every single married or engaged woman that you know wears a diamond ring on her finger and most have become quite acquainted with the basic information required to asses a stone (IE the 4C’s). However, how many of those consumers have actually looked into the past price performance of these stones?

Believing that the answer is “not very many”; we have also therefore collected the data from the Rapaport Price Report (Colourless Diamond Market Index) which is the jewellery industry’s standard for pricing natural COLOURLESS (white) diamonds. We then put those numbers to the test.

The chart below compares the increase in price over the course of 5 and 10 years of Colourless stones compared to Natural Fancy Colour Diamonds. The stones used in the comparison were:

  • 0.50ct Colourless Round compared to a 0.50ct Fancy Intense Argyle Pink
  • 3.00ct Colourless Round compared to a 1.00ct Fancy Yellow
  • 5.00ct Colourless Round compared to a 3.00ct Fancy Light Pink

As one can clearly see, the difference between each compared stone is quite drastic:

Example 1: 0.50ct Colourless Round VS. 0.50ct Fancy Intense Argyle Pink

While the 0.50ct Colourless stone had a price increase of only 10% over a ten year period (which is a respectable appreciation by regular investment standards) the 0.50ct Fancy Intense Pink Argyle diamond had a increased by a meteoric 375% over the exact same time period!

Conclusion:

0.50ct Colourless = 10% Appreciation

0.50ct Fancy Intense Pink Argyle = 375% Appreciation

Example 2: 1.00ct Colourless Round VS. 1.00ct Fancy Yellow  

While the 3.00ct Colourless stone had a price increase of 55% over a ten year period (which is again a very respectable appreciation by regular investment standards) the 1.00ct Fancy Yellow diamond had a increased by a substantial 322% making the two clearly uncomparable to investors!

Conclusion:

3.00ct Colourless = 55% Appreciation

1.00ct Fancy Yellow = 322% Appreciation

Example 3: 3.00ct Colourless Round VS. 3.00ct Fancy Light  

In our final comparison, we tried to give the colourless side a fighting chance by using a substantially sized 5.00ct Colourless stone which had a great price increase of 159% over a ten year period. Which the 3.00ct Fancy Light Pink dominated by it's 318% appreciation in value!

Conclusion:

5.00ct Colourless = 159% Appreciation

1.00ct Fancy Pink  = 318% Appreciation

Final Verdict: The bar graph above again provides empirical evidence that over a twelve year period, Natural Fancy Coloured Diamonds display much stronger performance characteristics than any of the other major alternative investments in the market.


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What Our Clients Are Saying


For several months I had considered investing in Fancy Colored Diamonds. I heard all the negative jargon about unscrupulous people in the diamond business and how you could be taken to the cleaners, sort of speak.  However, I called Northern Cross Diamonds and spoke to Stephen who is the owner. My experience with him from the early process to the actual purchase of a Fancy Colored Diamond from him was quite a journey.  He urged me before buying the diamond to do my own due diligence by comparing the price and quality. Needless to say I did not find one of like shape, color, clarity or price that would have changed my decision. If you would like to speak to me directly for more information you can get my telephone number from Northern Cross.


Read MoreAllan C.
Mississauga, Canada

My husband and I chose NCD to assist us in finding the perfect engagement ring that would compliment my style. We mostly dealt with Stephen who was very knowledgeable and really took the time to listen to what I was looking for and offered a really great selection of options to choose from. Thank you Stephen and NCD; I couldn't be any happier with my brand new canary yellow diamond ring. You wouldn't believe the compliments and interest that people give it. I just love it!! Thank you again for everything!


Read MoreMaria M.
Bolton, Canada

I found Northern Cross Diamonds because I was looking for a colored diamond for an engagement ring to propose with. There are not many companies that have colored diamonds but they have quite a few. After considering for a couple of weeks, I decided to contact them to discuss the diamond I was looking at. The guy I worked with, Stephen, was very kind and helped me with the purchase process. I even had to ask them to ship my stone across the world to China.  After I received it I had no doubt about the high quality of their products. I appreciate Stephen and Northern Cross to help me to achieve my perfect proposal plan. I am very happy to have done buisness with them and I will definately recommend Northern Cross Diamonds to anyone looking to get married or who would like to add more stones for their collection. Again, thank you Stephen


Read MoreXu
Beijing, China

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