Steps in investing in polished diamonds “How to buy diamonds”
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As we are faced with economic uncertainties, investors now seek a flight to quality. By including diamonds in your portfolio you will have more diversified assets to reduce your portfolio risk. The percentage of diamond investment is currently small but Altana Wealth Limited (the firm) perceive an increasing opportunity for this to rise significantly since diamonds are a solid asset class like the traditional precious metals.
Diamonds present similarities to gold as an alternative investment given that it is both used for jewellery and both posses a store of value. Both are extremely rare but nothing matches the impeccable rarity of diamonds. Many of the primary benefits gold provides as an investment is applicable to diamonds. Diamonds are tangible, transportable and liquid investments. Moreover, its value is independent of any government decree for this reason it maintained its value even during recession. The price of diamonds is controlled by few major players in the diamond industry (by having a supply-controlled business model.) Despite continuous price increase, these few major players have been highly successful in increasing consumer demand for diamonds. For this reason, our mission is to offer our valued investors certified polished diamonds at a discounted wholesaler’s price by passing/eliminating all the traditional retailers with their added high premiums. Through this mission, we endeavour to give our investors a way to purchase diamonds at a very advantageous price. We will make your diamond investment dream a reality with the lowest price possible while only acquiring certified polished diamonds.
Just like other industry, you may think that the diamond market can be relatively complex and intimidating when you do not know the market in depth, but we are here to guide you to a simple sales process. You may believe that only professionals can purchase diamonds or one should undergo years of training to acquire the secrets of the diamond trading. Those days of inaccessible diamond trading are gone as you can now buy (and sell) diamonds like the so called professional traders. We share our methodologies so you can see how we work and basically get to know who we are. You can share your challenges with us so we can offer you opportunities and solve complex diamond purchasing problems. Let us take away your doubts in investing in solid alternative asset class. If diamond trading was formerly inaccessible before, with Altana Wealth Limited’s diamond sales process you can easily learn all the essential steps to build profitable diamond investments.
We will provide you a model investment portfolio to give you a general overview on how Altana Wealth Limited initiated its profitable diamonds investment portfolio. In parallel,
we will also provide you our exclusive method to identify the best purchases by identifying a good diamond investment strategy as it is vital to understand its price trends and investigate about its quality, registration, secure shipping and storage. With our diamond sales process, buying high quality diamond is much simpler than the retail stores would like you to believe. The explanation is simple. It is due to the inefficient distribution system. If you knew how straightforward it is to purchase high quality diamonds, you would not pay a large amount of money for the very simple service that retailers are providing. While intermediate channels try to give you too many irrelevant concepts and information that play no part in your effective diamond investment process, we are committed to only provide you with knowledge that is truly essential so that you can best decide what diamonds to include in your asset portfolio.
Strategy in investing in polished diamonds (Sales Process)
Altana Wealth Limited believes that the best aspects in life are frequently simple. For this reason, we provide our investors with our simple diamond sales process. The simplest and best way to purchase diamonds are the following:
I. Identify your investment budget
The initial step is to identify “how much are you willing to invest?” For example, one investor can have an initial budget of worth US$100,000 for his/her diamond investment portfolio.
In parallel to this initial step, we will help you identify the diamond that fits your investment budget while offering you diamond prices that you never saw before.
II. Acquire knowledge about diamonds
Once you have identified your investment budget, one must first know where to take essential information about diamonds. One can gather vital information through various specialised organizations such as International Diamond Exchange Website (IDEX), Rapaport Diamond Report and Gemological Institute of America. In order to have a better understanding of the diamond industry and its price trend, one can subscribe to the Rapaport Magazine.
In verifying the quality of a diamond, one must evaluate the so called “4 C’s,” which include cut, colour, clarity, and carat weight. These “4 C’s” are considered as the starting point before purchasing any diamonds. The following paragraphs will explain the important factors to consider in each “4 C’s.”
Regarding the CUT, one must ask “what type of cut am I willing to invest?” While having this question in mind, one can consider that the brilliance/light depends on the cut of a diamond. The following figures shown below illustrate how the brilliance is graded on each diamond cut and the various diamonds cut shapes.
Figure 1: Brilliance Grade according to Diamond Cut (Source: Harry Winston)
Figure 2: Different Diamond Shape Cut (Source: Starr Diamond Co.)
Secondly, for the COLOUR one must ask “what colour scale am I willing to invest?” The more transparent the diamond is the more expensive and the rarer it is. The following figure shown below illustrates how diamonds are graded on a colour scale.
The third C is the CLARITY. This parameter requires high level of expertise as diamonds are too small to clearly evaluate the flawlessness of a diamond with our naked eye. According to gemmologists, the greater the number and size of inclusions within a diamond, the lower its clarity grade. Therefore, one must look at a gemmologist’s clarity grade before purchasing a diamond and eventually ask “what clarity standard am I willing to invest?” Figure 4, illustrates a diamond’s clarity grade.
Figure 4: Diamond’s Clarity Grade (Source: Blue Nile)
Last but not the least C is the CARAT weight. Each diamonds size is calculated through its carat weight. One must ask “what carat weight of diamond am I willing to
invest?” Normally, the larger the diamond is, the more expensive it is. But one must not
forget that the brilliance may vary according to the cut and proportion. Therefore, we cannot have an exact price if we only base the diamond value on the carat weight. Figure 5 shows the different diamond sizes (Please note that the sizes of the stones as viewed on this page do not represent the actual sizes.)
Figure 5: Different Diamond Carat Weight (Source: Diamond)
After learning the “4 C’s”, the firm created a summary table (please refer to Appendix 1) that will help you identify your “acceptable quality grade” for your diamond investment plan. We found a 3-minute video on how to choose a diamond by taking into consideration
the “4 C’s.” This 3 minute video is extracted from the Gemmological Institute of America (GIA). (http://www.gia.edu/resources/flash/4cs/GIA.swf)
The firm also conducted market research in order to acquire profound knowledge about diamonds. Our market study showed that despite recession the diamond prices still continued to increase from year 1960 to year 2010 (Appendix 2: 50 Years Historical Diamond Price Trend Chart.) One of the main reasons that the price of diamonds increased is the closure of hundreds of medium and large diamond mines in Africa. The increasing number of high net worth individuals globally such as Russia, Asia and the Middle East also has an impact on the diamond supply. As the production decreases, the value of these precious stones increases. A higher proportion of mined diamonds were allocated to industrial diamonds (surgical equipment, lasers and drills) than diamond jewelleries. Since, there is a continuous high demand for diamonds with low supply, the prices of diamonds increased over time.
From the firm’s initial diamond investment we are committed to continuously monitor the diamonds’ price and its industry environment. According to the IDEX Online, Polished diamond prices rose by about 1.6% during the month of April. The average price of polished diamonds increased by 1.9% in April compared to March, bringing the Index to 130.6. The month-over-month 1.9% increase was one of the largest price increases since 2008. On a year-over-year basis, polished diamond prices rose by 13.9%. This is the largest such price increase since pre-crisis June 2008. (Please refer to Appendix 3 for polished diamond price index.)
Also, polished diamond prices for larger stones (4 carat diamonds and above) showed a modest price increase in comparison to smaller stones (3 carat diamonds and below). (Please refer to Appendix 4 for polished diamond prices by size.)
III. Identify an acceptable quality standard of diamond
Before buying any diamonds, one must know his/her minimum acceptable criteria in each “4 C’s” parameters. You can consult various diamond specialists/sellers to acquire information and eventually identify your diamond investment plan. The diamond investment plan will illustrate your specific diversified diamond portfolio. One must remember that the diamonds’ quality is characterized by the combination of all the “4 C’s” cut, colour, and clarity and carat weight. Therefore, each of these parameters influences the value/price of a diamond.
After thorough research, the firm considered buying diamonds from Luxury Diamond Investment LTD with the following parameters:
- 40% of the budget will be allocated to smaller diamonds because we believe that these stones will always be in demand or needed by various jewellers. Hence, smaller diamonds are ideal and safe investments. Characteristics: 0.50 to 0.70 carats, F-H Colour and SI1/VS2 Clarity with round shape.
- 60% of the budget will be allocated to slightly bigger diamonds because we believe that these stones will always be excellent investments as studies show that these stones continuously increase in its prices. Moreover, bigger diamonds also possess properties of smaller stones. Characteristics: 1.0 to 1.5 carats, F-G Colour and VVS1/VVS2 Clarity with round shape.
The seller of diamonds will purchase loose polished diamonds at the maximum discount compared to the Rapaport price guideline. One of the firm's core values is to motivate our business partners (contacts) by aligning their interest with the client by rewarding them a 10 percent incentive of the difference between a minimum discount (typically 25%) from the Rapaport price and the price paid. Through this process, we ensure that we buy diamonds at a discounted wholesale price (for example: discounts may vary from 25 to 40 percent) which already represents a 100 percent discount from the prices of diamonds sold in retail stores.
IV. Conduct a phone interview with different diamond specialists, secure shipping and storage agents
Once you have identified your acceptable quality standard of diamond, you should consider calling various diamond dealers to collect information about diamond prices, so you can set a benchmark and/or a price range. Retailers will convince you that you are paying at the right and correct price but in fact you are paying a very expensive price. With our firm, we can easily purchase diamonds at a discounted wholesale price which means that you can save 100 percent on the same quality of certified diamond that you can see from the retail stores. Our firm will not disappoint you as you compare our prices to other diamond dealers.
In order to verify the diamond’s quality, it is important to verify its issued certificate as it confirms the diamond’s authenticity and its quality (“4 C’s.) One may consider contacting various institutions such as the Gemological Institute of America (GIA), the Hoge Raad Voor Diamant (HRD), Antwerp Institute of Gemology and the University of Antwerp
Gemological Institute (IGI) in order to acquire vital knowledge about diamond registration or certificate. By doing so, you will be able to see which laboratory has the best price for diamond grading and laser inscription. Contact details of each institution that the firm considered are listed below.
Gemological Institute of America (GIA): Telephone + 212-221-5858 European Gemological Laboratory (EGL): Telephone + 347 374 0039 International Gemological Institute (IGI): Telephone + 212 847-3326
After deciding which gemmological laboratory, you should arrange a secure shipping agent (such as Brinks or Malca Amit) to transfer securely the stones from the laboratory to your preferred storage location. One can rent a safety vault in a bank. To be more efficient you should find a main contact person in each company. Then, you can choose your top two or three companies. Before deciding which laboratory and secure shipping agent to hire, it is vital to identify all the costs involved in each purchase before completing any transaction (e.g. taxes, shipping and insurance).
The firm submitted its stones to the Gemological Institute of America (GIA) because we want to offer our investors a world-class certificate as it is the market leader in diamond grading, the most accurate, conservative and reliable laboratory in producing diamond grading report. After thorough evaluation of the stones, the firm’s diamonds will be securely shipped and stored from the Gemological Institute of America (GIA) to a tax free zone country in one of the most secure banks located in Switzerland or Belgium.
V. Exit Strategy
We believe that diamonds are a solid long term investment and a good means for investment diversification. As we are faced with global economic turmoil we look for secure assets and consider diamonds to be an alternative investment option to gold as it possess a store of value and it can increase in price overtime. While we believe that diamonds are transportable and accepted everywhere, we also highly respect the legitimate trade in diamonds by participating in the System of Warranties (Kimberly Process.) We commit ourselves to continuously track the value of the diamonds. Once there is an excellent market opportunity, the firm will sell its diamonds through its business partners (contacts.) The same motivation will be given to our
business partners, as we will significantly reward them with incentives once our diamonds will be sold at the best price.
If your aim is to save money while having an exceptional diamond investment, then Altana Wealth Limited’s “diamond wealth service/diamond sales process” is perfect for you. With us, you can trust that you are investing only in certified polished diamonds at a discounted wholesaler’s price. We simply value and represent our investors by providing services that is based in trust and professional expertise while also developing a rewarding affiliation. Our firm gives great importance to its core values – trust, professional expertise, drive for outcome and motivation through incentives. Our objective is to align our interest with clients from decision making process as we move towards the diamond acquisition process.
To conclude, we assure that we buy certified polished diamonds at a discounted wholesale price and verify the diamonds quality through international certified diamond gemological institute. Overall, through the firm’s diamond sales process, diamond investment is now accessible, secure and safe through our exclusive diamond investment strategy which is backed up by our thorough market analysis. Furthermore, we offer advice to optimize your diamond investments for high returns. It is our passion to guide our investors with its profitable diamond investments and provide them a more efficient means to trade polished
Appendix 1: The “4 C’s” Summary Table (Source: Altana Wealth Limited)
Cut: What type of cut am I willing to invest?
Carat Weight: What carat weight of diamond am I willing to invest?
Appendix 2: 50 Years Historical Diamond Price Trend Chart (Source: Ajediam)
Appendix 3: Polished Diamond Price Index (Source: IDEX Online Research)
Disclaimer
This marketing document is issued by Altana Wealth Limited (“Altana Wealth”) which is authorised and regulated by the Financial Services Authority in the United Kingdom (the “FSA”). The investment products and services of Altana Wealth are only available to persons who are professional clients and eligible counterparties for the purposes of the FSA’s rules. They are not available to retail clients.
Altana Wealth and Altana Wealth SAM, Monaco has taken all reasonable care to ensure that the information contained in this document is accurate at the time of publication, however it does not make any guarantee as to the accuracy of the information provided. While many of the thoughts expressed in this document are presented in a factual manner, the discussion reflects Altana Wealth’s beliefs and opinions about the financial markets and the alternative investment products (Alternative Investment Products”) described. These beliefs and opinions are subject to change at any time.
This document does not constitute an offer to buy or sell investments. In making a decision to invest prospective investors may not rely on the information in this document. Such information is preliminary and subject to change and is also incomplete and does not constitute all the information necessary to adequately evaluate the consequences of investing in Alternative Investment Products.
Nothing in these materials should be construed as a recommendation to invest in an Alternative Investment Product, or as legal, regulatory, tax, accounting, investment or other advice. Potential investors in the Alternative Investment Products are advised to seek professional investment advice prior to investing to ensure that the suitability of investing is properly considered.
Investors are also reminded that past performance is not indicative of future performance and that they might not get back the amount that they originally invested. Where the Alternative Investment Product or investments underlying these products are denominated in foreign currency, the product valuation will as a result of currency fluctuates. There are risks involved in investing in such products which must be fully understood prior to investing. No part of this report may be divulged to any other person, distributed, and/or reproduced without the prior written permission of Altana Wealth.
