Is a Diamond a Good Investment?
- Is a Diamond a Good Investment?
This is a very commonly asked question. Diamond jewelry is expensive compared to other and similarly beautiful gemstone jewelry. Therefore we wonder if we are going to spend so much would the value hold? Would I be able to at least redeem my purchase value if needed or in other words - Would it be a good investment?
Diamond prices have been steadily increasing for the past 20 years, and diamonds tend to hold their value. Given this, it is extremely unlikely that diamonds will ever entirely lose their value, in spite of how the market may change in the future. However, no one can predict, with absolute certainty, which way the market will swing. That is not to say that it is a good idea to buy diamonds and hold them as investment in your portfolio especially in your retirement savings accounts. Reselling diamonds will not return their value.
To make a profit, investors must at some time find buyers who are willing to pay more for their diamonds than they did. Here, however, investors face the same problem as those attempting to sell their jewelry: there is no unified market in which to sell diamonds. Although dealers will quote the prices at which they are willing to sell investment-grade diamonds, they seldom give a set price at which they are willing to buy diamonds of the same grade.
Have You Ever Tried to Sell a Diamond?
Edward Jay Epstein who wrote a brilliant book called 'Have You Ever Tried to Sell a Diamond?' (February 1982), uncovered the idea that diamonds make a good investment is a false one. Diamonds, he argued, are nearly impossible to sell once bought because any gain from the appreciation of the diamonds will probably be lost in selling them. He recounted one test conducted by a British magazine: the editor bought diamonds in 1970 and tried to sell them in 1978, but could not sell them for a price anywhere close to the one he had originally paid. Epstein also wrote of a wealthy woman who tried to resell a diamond ring she had bought for $100,000 from Tiffany & Co. in New York City. After shopping the jewel around in vain, she gave up. The problem with selling diamonds, Epstein noted, was that the buyers, not the sellers, control the price....
Diamond Supply is Controlled
Unlike other natural gemstones such as emerald, ruby, sapphire, amethyst, citrine and so on... diamonds do not trade freely depending upon the diamond supply and demand. The diamond supply chain is mostly controlled by one dynasty which is the Oppenheimer family of De Beers company. Their control used by over 80% of the world's diamond production and distribution and although it has diminished to 60% due to new mines in Russia, Australia and some new distribution channels of the diamond production in Africa, it is still a very controlled diamond supply chain. So there we have one primary reason or something comforting for you to know that although the prices are maintained artificially...the chance your your diamond holding value is good as it has been for many years in the past. Thanks to the De Beers control over the world's diamond production and distribution... more
Can I Sell my Diamonds and Redeem Full Value?
Cashing your diamonds to get your purchase value is a fallacy because the channels to redeem diamonds is not stabilized or structured. You are at the mercy of the diamond dealer or trader who will offer a price for your diamonds. He or she most probably will not offer the price you had paid and if the dealer you bought your diamonds is offering an exchange for a full value, we recommend that you verify your purchase price to begin with. Why? Because most likely the seller has large margin in the price of your diamonds that are being returned and will have large profit in the diamonds he or she will offer you in exchange. This is most likely to happen with brick and mortar jewelry stores such as mall jewelry stores or other high prices stores with a lot of glitter to attract you to their stores.
The Cost of Diamonds is Increasing
If you own diamonds now, you would be happy to know that diamonds cost more now that the time you bought previously. The cost of diamonds has been increasing steadily since few decades. The value of diamonds, though, has never reduced. A diamond has been cherished in all times, and they will always be a proud possession, despite how market would change. One's investment in a diamond depends on whether one is investing in the diamond itself, or what a diamond represents. Market swings are unpredictable, therefore, investing in good quality diamonds as major part of a financial plan is not always recommended.
Should You Borrow to Buy Engagement Rings?
Never go into debt for an engagement ring. It doesn't make sense. The average cost of a diamond engagement ring is $3,500 to $4,000. Jewelers recommend that you spend two months salary, but this is an arbitrary amount pushed by the world's largest diamond producer. Do you suppose they have your best interests at heart? Not! The diamond you buy may or may not increase in value, depending on its quality, but investments should not be made in anything as emotionally charged as a diamond engagement ring
We recommend that you get to know more about diamonds and compare bridal jewelry and ring prices online with eCommerce stores where your chances of finding better values are better. Many vendors online now offer certified jewelry with full product guarantee and are reputable... more
Did you Know...
Who's Diamond Cartel?
All About Diamonds
- The Diamond Cartel
- The Oppenheimers
- The De Beers
- Birth of De Beers Company
- Oppenheimers Arrive
- Long Arm of De Beers
- Diamond Monopoly
- What is Sight Holders?
- Name of the Game
- Artificial Diamond Value
- Artificial Diamond Scarcity
- A Diamond is Forever
- Smuggling from Africa
- New Competition
- New Diamond Sources
- Russian Diamonds
- Australian Diamonds
- Canadian Diamonds