Hard assets: The return of rare diamonds and gems

Luc Renneboog; Christophe Spaenjers

Hard assets: The return of rare diamonds and gems

Luc Renneboog, Christophe Spaenjers

Research output: Chapter in Book/Report/Conference proceeding › Chapter › Scientific › peer-review

Abstract

This note examines the investment performance of diamonds and other gems (sapphires, rubies, and emeralds) over the period 1999–2010, using a novel data set of auction transactions. Over our time frame, the annualized real USD returns for white and colored diamonds equaled 6.4% and 2.9%, respectively. Since 2003, the average returns have been 10.0%, 5.5%, and 6.8% for white diamonds, colored diamonds, and other gems, respectively. Both white and colored diamonds outperformed stocks between 1999 and 2010. Nevertheless, gem returns covary positively with stock returns, underlining the importance of wealth-induced demand for luxury consumption in collectibles markets.

Highlights

► We examine the returns on diamonds and other gems using auction data.
► Diamonds have outperformed equities (but underperformed gold) between 1999 and 2010.
► Equity valuations affect the prices of gemstones

Original language	English
Title of host publication	The Global Diamond Industry
Subtitle of host publication	Economics and Development
Editors	Roman Grynberg, Letsema Mbayi
Place of Publication	London
Publisher	Palgrave Macmillan
Pages	196-217
Volume	1
ISBN (Print)	9781137537577
Publication status	Published - Sept 2015

1 Article

Hard assets: The return on rare diamonds and gems
Renneboog, L. D. R. & Spaenjers, C., 2012, In: Finance research letters. 9, 4, p. 220-230
Research output: Contribution to journal › Article › Scientific › peer-review

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title = "Hard assets: The return of rare diamonds and gems",

abstract = "This note examines the investment performance of diamonds and other gems (sapphires, rubies, and emeralds) over the period 1999–2010, using a novel data set of auction transactions. Over our time frame, the annualized real USD returns for white and colored diamonds equaled 6.4% and 2.9%, respectively. Since 2003, the average returns have been 10.0%, 5.5%, and 6.8% for white diamonds, colored diamonds, and other gems, respectively. Both white and colored diamonds outperformed stocks between 1999 and 2010. Nevertheless, gem returns covary positively with stock returns, underlining the importance of wealth-induced demand for luxury consumption in collectibles markets.Highlights► We examine the returns on diamonds and other gems using auction data. ► Diamonds have outperformed equities (but underperformed gold) between 1999 and 2010. ► Equity valuations affect the prices of gemstones",

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AB - This note examines the investment performance of diamonds and other gems (sapphires, rubies, and emeralds) over the period 1999–2010, using a novel data set of auction transactions. Over our time frame, the annualized real USD returns for white and colored diamonds equaled 6.4% and 2.9%, respectively. Since 2003, the average returns have been 10.0%, 5.5%, and 6.8% for white diamonds, colored diamonds, and other gems, respectively. Both white and colored diamonds outperformed stocks between 1999 and 2010. Nevertheless, gem returns covary positively with stock returns, underlining the importance of wealth-induced demand for luxury consumption in collectibles markets.Highlights► We examine the returns on diamonds and other gems using auction data. ► Diamonds have outperformed equities (but underperformed gold) between 1999 and 2010. ► Equity valuations affect the prices of gemstones

M3 - Chapter

SN - 9781137537577

VL - 1

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BT - The Global Diamond Industry

A2 - Grynberg, Roman

A2 - Mbayi, Letsema

PB - Palgrave Macmillan

CY - London

ER -

Hard assets: The return of rare diamonds and gems

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Research output

Hard assets: The return on rare diamonds and gems

Cite this