Today’s volatile markets have convinced many investors to add hard assets to their portfolios as a means of preserving their wealth. Money can be viewed as having two distinct functions. It is a medium of exchange and also serves as a store of value. When the markets are unstable, capital is often moved into hard assets to preserve value. These hard assets are held through difficult economic times and when the economy improves, the hard assets can be translated back into currency often at increased value. Rare art, antiquities, gold, silver, some precious gemstones, exceptional white diamonds and natural color diamonds are considered hard assets. Today’s investors are seeking strategies to preserve their wealth and are choosing exceptional white diamonds as an important part of their portfolio.
The historic Beau Sancy Golconda diamond
A chemically pure and structurally perfect diamond is transparent with no hue or color. However in reality, almost no gem-sized natural diamond is absolutely perfect. Diamonds may be affected by chemical impurities and/or structural defects in the crystal lattice. Most white diamonds are discounted in price when a slight yellow, brown or gray hue is detected. The majority of white diamonds are used in jewelry, typically in engagement rings. The diamonds that are used in the market place have chemical impurities that give the white diamond some color. The color grading system used by the Gemological Institute of America (GIA) grades diamonds with a system using letters. The color grade D is the whitest grade; E through Z color is detected in the diamond. Around the letters of K through L, a diamond is no longer visually seen as white and will have a very slight tint of yellow, brown or grey. There is no grade higher than a D and this color is called “water white”.
There is narrow group of “water white” diamonds that could be potentially considered as an investment. The qualities that are necessary for an investment grade white diamond should posses top color (D), top clarity ( Internally Flawless) and top quality cutting which consists of exceptional geometry, polish and symmetry. These qualities will appear on the diamond’s accompanying gemological grading report from an internationally respected gemological laboratory. Many existing D color graded diamonds are scientifically categorized as Type 1 crystals and could contain trace amounts of Nitrogen, but does not appears to be colorless or “water white”. There is an even more rare category of investment white diamonds. These diamonds are scientifically categorized as Type IIa diamonds.
Diamonds are scientifically classed into two main types (Type I and Type II) and several subtypes (Type 1aA; Type 1aB; Type Ib; and Type IIa and Type IIb). Due to the nature of impurities present and how these impurities affect light absorption, denote its scientific classification.
The exceptional white diamonds that are extremely rare are Type IIa diamonds and make up less than 1% of all gem diamonds mined. They often appear whiter, brighter, and more crystalline than a D grade and are referred to as Golconda-like or Super D. This chemically pure type of diamond has exceptional optical transparency. Type lIa diamonds were first identified as originating from India (particularly from the Golconda region) but have since been recovered in all major diamond-producing regions of the world. Some Type IIa diamonds can be colored pink, red, or brown due to structural anomalies arising through plastic deformation during crystal growth in turn causing microscopic graining that produce the color. Type IIa diamonds without the microscopic graining are white and optically pure. These are the whitest of diamonds often traded for investment.
Today there is a well-established criteria for gemological laboratories to determine and describe a particular diamond and its characteristics. As with any investment gemstone a laboratory report from a reputable laboratory is essential. With the Golconda-like diamonds often there is an accompanying letter called the Diamond Type Classification for the Report (that has the diamond report identification number) that notes that this diamond is a Type IIa diamond.
This small category of diamond has steadily increased in value over the past 30 years, even in 2008 amidst the economic decline, this category held its value. An investment such as this is one that preserves wealth and is considered to be a medium to long-term investment. Real appreciation of these diamonds develop over time, and is suggested to allow this hard asset to appreciate for 4 to 10 years before reselling. There are many factors that will effect the appreciation of these white diamonds, one being the rarity of occurrence of these diamonds and the desire from the new centers of wealth to invest in diamonds. Purchasing this category of white diamonds will now prove to be a first-class investment as the demand for diamonds from these new centers of wealth increase each year.
Other advantages of white diamonds as a hard asset are that the radiant beauty of the diamond can serve as a collectible item, a treasured piece of jewelry or be used in estate planning purposes. It is a functional asset that is also an aesthetically pleasing object that can be both utilized and appreciated on a daily basis.
Thomas Michaels Designers, Inc. educates investors as to the nuances of investment white diamonds, natural color diamonds, and investment color gemstones. Through the resources and expertise we have developed over 30+ years in the diamond, gemstone and jewelry industry, we are able to supply the most exclusive and desirable investment diamonds and gemstones available in the world.
The historic Archduke Golconda diamond