Fancy Color FAQ's
Question: What are the main reasons for the upward
movement of prices in the colored Diamond market over the last 30 years?
Answer: Over the last thirty years the colored diamond market has evolved
from a little known area of interest into an established form of wealth
preservation and capital appreciation. The market has undergone a number of
significant changes during this time period. The science of analyzing and
grading colored diamonds has improved dramatically helping the general public
understand the inherent rarity of specific colors and its effect on market
prices. Advances in gem Laboratory techniques such as, scientific measurement of
color, precision colorimetric and improved methods of verbalizing colors have
immensely improved the grading of hue, intensity, lightness and other physical
qualities, which has brought the recognition of colored diamonds to the
forefront of the diamond markets. The retail trade has seen a surge in buying
for a broad spectrum of colored diamonds, particularly yellows, cognacs, pinks
and blues.
Question: How would AM-Diamonds.com recommend I handle storage for privacy
and discretion?
Answer: There are a number of Safekeeping facilities located around the
world. One such service is P.G. Services s.a., which provides for a secure
environment for your holdings through the relationship with and exclusive use of
the services of Somatra s.a., which since 1959 has been an international company
of secured storage and transport. Their partnership with Port Francs et
Entrepots Geneva s.a., founded in 1888, assures the client of security with
discretion. As correspondent agents for Brinks they are known throughout the
world. Their secured storage facilities are located in the ÒFree ZoneÓ a
tax-free area adjacent to the Geneva international airport. Goods are stored in
trust in the free zone on a fully insured basis. Somatra s.a. will provide
clients of P.G.Services s.a. with an itemized statement of valuables held in
trust with a corresponding document of insured value on request. Your valuables
can be accessed either on a personal basis or transported via armored car
delivery to any major world city. Somatra s.a. provides private facilities with
natural lighting, calibrated scales and professional instruments for personal
inspection of your collection. The major auction houses and luxury retailers can
be counted on the Somatra s.a. client roster. For confidential, insured,
tax-free storage of your valuables we highly recommend the use of Somatra s.a.
S.A. who for over forty years have provided discreet efficient service to the
industry.
Question: Why are grading and certification so important in acquiring colored
diamonds?
Answer: Colored Diamond grading and certification are important aspects
for any important diamond purchase. We highly recommend GIA Laboratory Reports
as they are full recognized around the world and are required by most buyers
when you decide to sell your diamond.
Any diamonds acquired through the international marketplace must meet three
requirements: A.) The diamond is a natural colored diamond, not irradiated or
enhanced in any fashion. B.) The specifications of the color and the color
modifiers are described on the Laboratory Report. An internationally recognized
Gem Trade Laboratory grades C.) The diamond under these criteria.
Internationally recognized Gem Trade Laboratories possess the most advanced
equipment available to determine whether or not a diamond has been altered in
any way, making it impossible for an irradiated diamond to pass through the
certification and grading process. Furthermore, equipment for measuring color
saturation has risen to the level where it is possible to determine
scientifically just how much color any particular stone has. For the novice
collector, it is critical to know they are dealing with natural, authentic
pieces and proper Laboratory Grading Report guarantees that. The main
institutions for grading and certification used by Am-Diamonds.com are the
Gemological Institute of America in New York and California and the Diamond High
Council in Antwerp, Belgium. These two institutions are considered the standard
for grading and certification in the industry.
GIA: For more than 70 years, the GIA has developed a reputation as the
standard for diamond grading reports. This expert knowledge led to the creation
of the most respected and most advanced education available in the gemstone and
jewelry industry. The GIA offers a number of extensive courses on retail
management, appraising and jewelry design. As an independent nonprofit
organization, the Gemological institute of America is known for its impartial
service as one of the world's foremost authorities in gemology. The GIA combines
the principles of research, education and service to help professionals around
the globe use science and product knowledge to sustain the public's trust. Their
research in the areas of cutting and in treated diamonds has been instrumental
in advancing the trade into the 21st century.
HRD: The Diamond High Council (HRD), a non-profit organization, is the
official representative of the Belgium diamond industry. It was founded in 1973
in order to co-ordinate and optimizes all activities on behalf of the diamond
business in general. The HRD groups the four Belgian diamond bourses, trade
organizations and trade unions and acts as their spokesman. The Diamond High
Council is the officially recognized representative organization of the Belgian
diamond business. The HRD provides extensive training in the art of
certification, gemology and diamond grading. Located in the prestigious diamond
office right in the heart of the diamond district in Belgium, the HRD works
closely with customs and the government in regulating quality, quantity and
value of the international trade flows.
Question: How are colored diamonds valued?
Answer: Like a Rembrandt or a Monet, some colored diamonds (pinkish
purple, purplish red) are essentially one-of-a-kind pieces and are impossible to
put a market value on. International prices are based on private sales and
auction results. It is important for our clients to recognize that very few blue
and pink diamonds change hands each year. This is solely based on lack of
supply, for if it was up to the buyers, the volume would increase many times
over. By far the most valuable per carat, the red, green and purple colors are
difficult to value because of the lack of transactions in any given year. These
stones are valued on an individual transaction basis.
Question: What is the process behind a typical transaction in the colored
diamond market?
Answer: There are positives and negatives in dealing with each of the
different sides of the market. One option of acquiring a colored diamond is
through a retail jeweler, although potential buyers are paying full retail
price, and the selection is normally limited to the inventory available through
the retailer's suppliers. Very few retailers actually specialize in colored
diamonds. If you are planning on acquiring a colored diamond at one of the major
auctions, you are required to provide information of financial suitability in
order to enter into the bidding process. Either a cashier's cheque or a bank
wire transfer normally facilitates payment. Although you may be able to bid on a
number of different stones, auctions are a sellers' market, and bargains are
very rarely found. Furthermore, bidders are generally obliged to provide more
financial data than they would like to, and there is little discretion or
confidentiality. A third method is through a small group of international
specialty dealers. Although most specialty dealers only work with a select
client base, they are often in possession of a selection of rare and special
colored diamonds rarely seen at the retail level and at a more reasonable price
than at an auction. Specialty dealers are intimately in touch with both auctions
and the retail side of the market and therefore can be a good advisor because of
their market knowledge.
Question: How do I liquidate my colored diamond holdings?
Answer: There are a number of avenues available in the event that a
collector would like to liquidate their colored diamond position. Retail
jewelers occasionally buy colored diamonds but they have a limited budget and
few specialize in this segment of the market. Retailers also have a limited
clientele to market these pieces to. Auctions generally bring the highest per
carat prices, although stones are often held for months before the sale takes
place. In the auction market patience is essential, for positioning your colored
diamonds at the right time and in the correct geographic market can mean the
difference between thousands of dollars. Specialty dealers have a reputation for
selling at fair market value, and because of their diverse client base, they can
usually sell on a client's behalf in a relatively short period of time. If you
are looking to maximize your returns, an auction is better suited to your needs,
whereas a specialty dealer has the client base and the marketing to liquidate
your position in a more timely fashion.
Question: What are the main reasons wealthy and successful people hold
colored diamonds as a means of wealth preservation?
Answer: The core holdings of wealthy and successful people have always
included estate jewelry, precious gemstones and important diamonds as both
status symbols and as a means of maintaining wealth. Increasingly colored
diamonds are a core holding because of their rarity, mystique and inherent value
created over the years. Other assets, such as stocks and bonds, are subject to
the movements and fluctuations of market conditions. Real estate cannot be
quickly liquidated and is the first asset seized in times of turmoil. One of the
main reasons for holding precious gems has been their ability to provide a
safety net during times of political and economic upheaval. During WWII,
countless people left Europe for America with only their jewelry holdings to
help them weather the storm. When China became communist in the 1960's, hundreds
of Chinese who fled the mainland in hopes of starting their lives anew were able
to do so with nothing more than diamonds and jade sewed into the lining of their
clothes. Finally, many families in Southeast Asia who lost enormous portions of
their wealth virtually overnight escaped the economic crisis of 1997 unscathed
due to their gem portfolio holdings.