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26 June 2012 - A Gem of an Investment

 

With stock market volatility very much an issue, many investors are looking for something rock solid to add to their portfolio. Or perhaps just a rock. But is a diamond a sparkling investment, or is it a case of 'all that glitters is not gold'?

Diamond expert Mike Asscher, Vice President of the Amsterdam-based Royal Asscher Diamond Company was in Jersey recently for a special event organised by Hettich Jewellers, and took the opportunity to give a crystal clear perspective on this growing market. "Statistics over the last 25 years show that diamond prices have gone up significantly. And along with the knowledge that your investment will probably increase, you can also enjoy the beauty of the diamond itself as a piece of jewellery. However, personally, I'd always choose to buy diamonds for pleasure rather than simply return. There are investors who spend hundreds of thousands of pounds on a very unique gem and then they have to keep it in a safe. That always seems to me to be a shame - I like to see jewellery worn and enjoyed."

The Far East has seen the biggest increase in diamond buying recently and this year Royal Asscher will open flagship stores in mainland China and Japan. Why the diamond rush? "Take Japan for instance. After the turmoil of the tsunami, people have tended to return to their core values and examine what's really important to them. For most, it's their family and cherishing the people they love, and that's when you see a rise in people getting engaged and married." The investment market has also seen enormous growth. "It's interesting to examine the differences in markets between Japan and China. The high-end Chinese market go for the highest investment they can make - large, expensive, high quality diamonds; while in the fast growing, middle class Chinese economy there's investment in large diamonds as well, but in the lower colours and clarities. In Japan the focus is on quality more than anything else, so colour, clarity and the cut of the diamond takes priority over the size."

As the sixth generation of a 160 year-old family business, Mike Asscher knows every facet of the diamond industry. "We see diamonds as being one of the most precious things we can possess and we want to share that with our consumers. That's how we've always felt, and the reason why we still exist and have the same reputation in the diamond industry as we did a century ago."  Their signature Royal Asscher cut is one of the best known in the world - perfectly symmetrical and high on sparkle with 74 facets compared with the 58 facets of other modern square-emerald cuts. "Unlike most other manufacturers, we cut for beauty and not for yield."

The Asscher family has a strong link with Jersey and Hettich Jewellers. Fifty years ago, when Mike's grandparents first came to Jersey for their annual holidays, they struck up a friendship with the Chinn family and the relationship between the two family-run businesses has continued to this day, with Mike's father and uncle both having been regular visitors to the island. Hettich's Director, Jeffrey Chinn, says: "It's a great privilege to be associated with a family that is so passionate about diamonds. From cutting the Cullinan diamond in 1908 to creating the stunning Royal Asscher cut, and now their Stars of Africa initiative, the Asscher family have been at the forefront of diamond production and innovation."

More than just a symbol of eternal love, diamonds are not about to lose their sparkle anytime soon. Mike adds "Archaeologists believe that in the next few decades, we'll see a decline in the numbers of natural diamonds being found. That's not to say that we won't see more new mines in Canada and Russia, but the old mines in South Africa and Australia are finishing. In terms of diamond prices that will mean the price of fancy coloured diamonds, as well as the natural colourless stones, will increase, which is an interesting long term perspective. As an investor, you're always looking at the long term perspective and, in the meantime, you can enjoy the sparkle of your beautiful diamond!"