Pickingalpha.com talks to Marcello Manna, Director and Sales Manager, Investment Diamond Company about investments in diamonds.
Q: Diamonds – is the most exciting topic to every woman on this planet. What are the prices of diamonds, do they ever go down?
MM: For prices normally people think about only one category of diamonds. We have to know that there are over 60,000 categories of diamonds. It means that each one has a price trend and an evolution of the price.
Q: Is there volatility on diamond market?
MM: You don’t have to understand that diamond is related to industry, when I speak about industry I don’t mean synthetic or industrial diamonds. No, I don’t speak about that. I speak about jewelry; here we are tied mainly geographically and economically to East market. It means for example the most important market for us is represented by USA, China and India.
Q: What about Russia? Russian women love diamonds.
MM: Normally, Russian people prefer to buy outside Russia. We have little paradox, that internally Russian consumption of jewelry is not as developed as the consumption by Russian people outside Russia.
Q: What about diamond groups; is there the most volatile diamond group?
MM: When we talk about volatile groups of diamonds, I have to talk about economic condition of Europe because Europe and Japan used to demand a particular category of diamonds. This category for the last ten years is the most damaged in price. I am talking about a particular diamond category it is 1 carat diamonds, which has lost about 25 percent in the last ten years.
Q: So what makes diamond prices go down?
MM: When we don’t have demand from people meaning that we have a steady supply but we don’t have demand. For example, in Europe we don’t have as strong demand for diamonds as before.
Q: So where is the strongest demand right now?
MM: In general, the strongest demand that we have right now is in the USA and the emerging markets where they used to demand commercial goods – not high quality goods. It means that the last five years we have about 400 percent increase in the sales of not high quality goods.
Q: What about artificial diamonds, have they overtaken the market?
MM: First of all you have to be sure when you buy a diamond you have to demand certificates and not only certificates, but also to make sure that people which you buy from, the jeweler, the professionals, are particularly competent in those markets, only this way you can make sure that you buy not only a good diamond, but a value diamond.
Q: So what is the difference between buying a ring or investing in a diamond?
MM: It is only an approach, a different approach. When you buy a ring- you buy what you like. When you buy a diamond for investment, you have to buy something that would probably increase in value in the future. It may be a diamond that you don’t like.
Q: I find it hard not like a diamond, but anyway where are the diamonds stored if I want to invest in diamond? Will I store it myself and insure it myself or you will store it for me somewhere?
MM: Our Society can offer a service to keep the diamonds but normally investors want to look at their own diamonds.
Q: So do you foresee rising demand for diamonds?
MM: Now we have the advantage of a global diamond market, thanks to the internet technology. It means that if you stay in the USA you can request your diamond from Hong Kong. Today it is not important where the diamond is located but it is important that the diamond is traded on an online platform that you can sell very quickly and at the best price.
Marcello Manna, Director and Sales Manager, Investment Diamond Company. Graduated in Economics and enrolled in Italian Order of Professional Accountants. Member of the Antwerp Diamond Exchange. Graduate Gemologist, GG – Gemological Institute of America (GIA). Gemstone expert working for primary jewelers in Italy, Switzerland, France. Owner and General Manager of the MANNA MARCELLO BVBA based in Antwerp (Belgium) specialized in diamond trading.
Information: One of the most reputable institutions in the world that certifies diamonds is in USA, GIA (Geological Institute of America). The Geological Institute of America is also the institution that created the standard for the classification of diamonds eight years ago.