Diamonds are an enduring symbol of love, romance and commitment, signifying lasting relationships and enduring love because of their strength and beauty. They have been a treasured gemstone since they were first discovered and mined in India around the 9th century BC to the late 18th century AD. Small deposits were also found in the jungles of Brazil but supply was not enough to meet demand.
Diamond mines were later discovered in South Africa and the production of diamonds increased substantially. In 2012, Russia officially stated there are massive diamond reserves in their mines containing trillions of carats, claiming there are enough diamonds to supply global requirements for the next 3000 years.
In rough form, diamonds are shipped to the worlds cutting centres to be shaped and polished before being set as jewellery. Diamond cutting is concentrated in a few cities around the world including the Antwerp diamond district in Belgium, Surat, Gujarat, Tel Aviv and New York City.
- Cut – The cut will determine its shape, but cutting incorrectly will compromise its defining sparkle.
- Colour – The most valuable and rare colour is white (colourless).
- Clarity – Measures the flawlessness of the diamond.
- Carat – The weight and the size of the diamond. A carat is equal to 0.2 gm. The average size of most engagement ring diamonds is between one carat and half a carat.
All four must be considered equally when comparing diamonds, but according to Tiffany and Co it is the how the diamond is cut that determines its characteristics.
The first recorded presentation of a diamond engagement ring was in 1477, when Archduke Maximilian of Austria proposed marriage to Mary of Burgundy. This influenced the upper-class and those of significant wealth to give diamond rings to their loved ones.
The top 10 most notable diamond engagement rings (in no particular order):
- John F. Kennedy when he proposed to Jacqueline Lee Bouvier, presented her with a diamond and emerald engagement ring. The ring consisted of one 2.88 carat diamond mounted next to a 2.84 carat emerald with tapered baguettes.
- Keith Urban gifted his beautiful wife to be, Nicole Kidman a Cartier engagement ring. It is an antique style three stone engagement ring set with round brilliant centre diamonds, and her wedding band is said to be Cartier eternity band. The ring is priced at $ 45,000.
- Richard Burton purchased a 33.19carat Asscher cut Krupp diamond for Elizabeth Taylor. (The diamond ring has since been sold at auction in 2011 to a private buyer from Asia for £5.6million).
- Prince Phillip gave Queen Elizabeth II an engagement ring that was made from diamonds from his mother’s tiara.
- Princess Diana’s engagement ring consisted of an 18 carat blue oval sapphire encircled by 14 diamonds and cost around $45.000 at the time. Now worn by the Duchess of Cambridge from Prince William.
- Jay-Z gave Beyoncé an 18 carat emerald cut diamond ring designed by Lorraine Schwartz and valued more than $5 million.
- Paris Hilton received a $4.7 million 24 carat white gold ring with a rectangular diamond from ex fiancé Paris Latsis.
- Michael Douglas gave Catherine Zeta Jones a 10 carat antique marquise diamond estimated at almost $2.5 million.
- Jennifer Lopez’s 6 carat pink diamond ring with 3 baguette white diamonds and a platinum band was given to her by Ben Affleck.
- Brad Pitt gave Angelina Jolie a stunning tablet shaped 16 carat diamond engagement ring which he helped to design. It is estimated to be worth $500,000.
In November 2013 Sotheby’s sold the most expensive diamond ever for $83.2 million, making it the most expensive jewel sold at auction. The stone was a 59.6 carat flawless plum sized pink diamond called the pink star. The previous record for a diamond sold at auction was $46 million for a 24.68 carat pink diamond bought by Laurence Graffiti in 2010.
Investors who are looking for an inflation busting commodity other than gold should perhaps look at investing in diamonds.
The value of diamonds is not directly linked to the stock market or overly affected by its daily fluctuations, making them an ideal financial instrument that holds its value in times of recession and increases in value during inflation.
It is expected that demand will grow by over 6% per annum to be worth nearly $23 billion by 2020. This coupled with the fact that no new mines have been found in the last 20 years and the increase in gems needed to service big luxury markets like the U.S. and China means that the value of diamonds will continue to rise as demand far outstrips supply.
The added bonus of diamonds is their high value to weight ratio, which makes them easy to store and transport, a high quality diamond weighing as little as 2 or 3 grams could be worth as much as 100 kilos of gold.
For investors looking for security and a safer option to place their money, investing in diamonds could well be the answer. With both industrial and precious status, this alternative asset class is seeing demand continue to soar.