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diamond historical prices


brannetti
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It's going to vary a great deal depending on the details of the stone and the market your discussing. Can you tell us a bit more about what you're trying to accomplish. There is no blanket answer to your question but it may be possible to find your answer through another approach.

 

 

This question does raise an interesting question for the site. Hermann, you've had a database of lots of stones for sale by lots of dealers for 5 years or so. This gives you a pretty good basis for looking at trends, at least over that time and in this marketplace. Do you keep a historical record of the database?

 

Neil

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It would be interesting to see historical diamond prices, esp. relative to the 10-year T-bill or the S&P500. I would venture to guess that the chart I describe would be a sure-fire deterrent to any would-be so-called "diamond investors".

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Ben,

 

Welcome back, we haven’t seen you in a while.

 

To some extent that information is available and I suspect that diamonds would stack up pretty well over the past decade or so on a chart. The problem with ‘investment’ diamonds is threefold.

 

1) Defining the property is difficult. Not all 1.00 D/IF diamonds are the same after all. Grading details make a big difference.

2) Transaction costs at the point of purchase. Usually this will range from 25% to 50% of the initial purchase price.

3) Transaction costs at the point of sale. As with the purchase, losing 25%-50% to the dealer is not unusual.

 

These can combine to have a disastrous affect on potential ‘investors’. For example:

In the database here today there are 3 pages of offers for round brilliant, 1.00-1.02 D/IF (this is the size and grade usually referenced when people talk about investing in diamonds) that range from $12,800 to just over $21k. Change that to E/VVS1 and the bottom asking price drops to $6200. That’s more than a factor of 3 range based entirely on grading accuracy and attributes that don’t generally appear on the price matrixes! That would be a whopping margin of error in any chart that claims to show the appreciation rate of that stone over a span of a few years or even decades. The profits paid to the dealers in the process the selling and buying just make it more extreme.

 

Compare that to stocks, where the spread is less than 1% and the dealer commission is $7 for each sale regardless of how many shares are bought or sold.

 

Neil

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Thanks Neil, it's good to be back. I was on sabbatical during the summer, in a place far away from civilization. Just got back a few days ago.

 

You make some good points. I would also add that the variance in price due to grading would also weigh in as the average characterization of the world inventory changes over time. For example, if there are more E-rated stones this year vs. last year, that factor alone would likely have more impact on the average price than basic appreciation by itself.

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