Argyle Investment Diamond: Worth it or not?

[lelli25]

Hi everyone!

With the Argyle mine now closed and the last pieces coming through, I thought it may be my last chance to purchase one of these rare diamonds.

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Solid Gold Diamonds is Australia's premiere diamond jewelers based in Perth & Adelaide. With over 30 years of experience, we deliver the finest quality jewelry at the most competitive prices. Shop now!

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What's your opinion on this? Comes with an Argyle certificate.
A) What would you roughly price this at in the current market
B) What do you think of it as an investment piece

Cheers!

 

[distracts]

I have no idea about diamonds as investment, but for me, if I had the money for this, I wouldn't hesitate to buy it. Half a carat is a good size for an argyle pink.

 

[Bron357]

It’s easy to buy diamonds, it’s very hard to sell them if you aren’t trade.
Yes, Argyle diamonds have been good investments and the mine has closed now but………..
I worked in Financial planning, now retired.
This type of investment class ie “other” should be less than 10% of your total portfolio. If you’re over 50, less than 5%.
It should be viewed as a long term capital gain asset (10 years plus) there will be no income stream, no tax advantages (though seek your own advice depending on where you reside), it is an indivisible investment (in an emergency you can’t “sell a bit of it” ) it will have holding costs ie storage and insurance and disposing of your asset will be well over 30 days and with fees / commissions involved (auction house, diamond broker etc).
That particular diamond is a P1 with unfortunately distinctive eye visible inclusions. The colour is not “top”, the oval shape not the most desired cut and the carat weight is relatively small so we aren’t talking “true investment grade”.
If I wanted a nice Arygle diamond for a ring, provided I didn’t damage it or lose it, in 10 years or so I wouldn’t expect to lose any money on my purchase but it wouldn’t necessarily be a quick or highly profitable sale.
Buy diamonds for wearing enjoyment, not as an investment.

 

[lelli25]

It’s easy to buy diamonds, it’s very hard to sell them if you aren’t trade.
Yes, Argyle diamonds have been good investments and the mine has closed now but………..
I worked in Financial planning, now retired.
This type of investment class ie “other” should be less than 10% of your total portfolio. If you’re over 50, less than 5%.
It should be viewed as a long term capital gain asset (10 years plus) there will be no income stream, no tax advantages (though seek your own advice depending on where you reside), it is an indivisible investment (in an emergency you can’t “sell a bit of it” ) it will have holding costs ie storage and insurance and disposing of your asset will be well over 30 days and with fees / commissions involved (auction house, diamond broker etc).
That particular diamond is a P1 with unfortunately distinctive eye visible inclusions. The colour is not “top”, the oval shape not the most desired cut and the carat weight is relatively small so we aren’t talking “true investment grade”.
If I wanted a nice Arygle diamond for a ring, provided I didn’t damage it or lose it, in 10 years or so I wouldn’t expect to lose any money on my purchase but it wouldn’t necessarily be a quick or highly profitable sale.
Buy diamonds for wearing enjoyment, not as an investment.

Thank you for your invaluable information @Bron357

 

[yssie]

Whilst this is certainly the most reasonable “investment opportunity” thread I think we’ve had here in several years… I agree with Bron - it’s not truly top shelf and it’s going to be hard to unload, both negatives in investment concept. That said, it’s a very very special stone, so if you do buy just to own and enjoy - pretty please share at least a hundred photos!!

 

[kenny]

You and I must pay retail when buying diamonds, but sell them at wholesale.
If wholesale is 50% of retail then prices would have to double to just break even.

So much for the investment thing.

 

[lelli25]

You and I must pay retail when buying diamonds, but sell them at wholesale.
If wholesale is 50% of retail then prices would have to double to just break even.

So much for the investment thing.

I actually get corporate / wholesale rates with these!

 

[kb1gra]

Colored diamonds are a crap investment. With the way crypto and the US stock market are performing right now, it's a foolish purchase if you have that kind of cash.

 

[Madrokaleb]

Precious stones have high liquidity and a transparent pricing policy, so they are a good object for investment. In addition, unlike gold, diamonds are compact, mobile, undemanding to storage conditions, and have low price volatility. They also do not require registration of ownership rights, have the potential to increase the value in dollar terms, and can form the basis of jewelry. I learned a lot of this from the source investorjunkie.com. If you are still hesitating about whether to purchase a diamond or not, definitely agree to the purchase.

 

[Rockdiamond]

It’s easy to buy diamonds, it’s very hard to sell them if you aren’t trade.

It ain't an easy job even if you are in the trade!!!

If wholesale is 50% of retail then prices would have to double to just break even.

Actually- today, "retail" is less than double the wholesale price.....say an average margin is 25-35%
So a $10,000 wholesale priced diamond is generally offered between $12,500-13,500. BUT- if a dealer can buy diamonds at wholesale from suppliers- they get terms, and there's no risk of potentially buying a stolen diamond....basically, it's a lot riskier for a dealer to buy a stone from a consumer. That means consumers can NOT sell diamonds for wholesale prices to dealers. My experience shows that a consumer can recover between 50-70% of wholesale.

I actually get corporate / wholesale rates with these!

@lelli25
We have heard this many times before.
This is a huge red flag in general- I mean no offense to you!
Wholesale is buying items in bulk.....a consumer buying a single diamond is a retail sale. No matter who they buy it from. When a seller is willing to abuse language, or lie to make a sale, that, in itself shows a disregard for the truth.
Not exactly a sterling recommendation......

 

[denverappraiser]

Wholesale is a bit difficult to define in this industry. It's not like most other products where there's a manufacturer who sells their widget to their dealers who in turn sell them to the public. As David mentions above, wholesale diamonds involve a whole bunch of other things, most notably special financing. The more unusual the item, the more valuable this becomes. 50-70% of wholesale is a good benchmark to start with, but for really exotic things that are likely to sit around for a while before they find a new home, it may very well be less. Wholesale is a little hard to pin down without wholesale comps, and good comps on this will be hard to find and will get even harder.

Also bear in mind that scarcity doesn't necessarily result in higher prices. The mine is closed and new production will be zero but that's only half of the formula. Do customers want them? Maybe. Maybe not. Predicting the future is difficult.