If you’re a jewelry lover like us, then you know that regardless of investment potential buying diamond jewelry is one of the most satisfying experiences known to humankind. But what about value? Is diamond jewelry a good investment or is it just a fancy, shiny piece of rock and metal that looks fabulous?
It’s a difficult question, but one that many have asked over the years. And to be quite honest, it’s not a clear cut answer.
Diamond jewelry is usually made up of gold, silver or platinum, paired with various diamonds of different shapes and sizes.
Diamonds themselves have been known to be a commodity in some circles, leading some people to think of them as a great store of value or investment.
However, others argue that diamonds are simply not intrinsically valuable, and therefore wouldn’t be the best “investment” per say.
So what’s the real story?
When you’re looking to buy diamonds and diamond jewelry for aesthetic purposes, the considerations you look at are different than those if you were looking for an investment vehicle. There’s not a lot of point in worrying about how the value of the stone and jewelry metal will fare over time when you just want to ice yourself out.
The best diamond stores won’t necessarily buy diamonds and jewelry from you. They’ve got their own suppliers and get great prices.
You’d most likely be looking at private sales. And that’s if you have loose diamonds.
Diamonds As an Investment
On the other hand, as an investment what you’re really looking at is whether diamonds can hold their value, or even better increase in value over time. Will their value stay the same in 10 years, when inflation makes the value of a dollar go down?
If so, then they’re probably a great way to invest your money. If not – if the price/value of your diamond drops along with the value of a dollar, then you probably don’t want to invest your money.
Here’s some of the things to consider when looking at diamonds jewelry as an investment
- diamond size
- diamond clarity
- diamond color
- diamond certification
- grade of jewelry metal
- type of jewelry metal
- age of diamond jewelry piece
- history of jewelry piece
Of course, we’re not financial advisors and this is not financial advice. You should always speak to a certified financial advisor before deciding how to invest your money.
The Real Value of Diamonds
But as far as we know, the value of a diamond is determined by it’s cut, color, clarity and carat weight. The more flawless and big a diamond is, the more it’s worth. Beyond that, the value of a diamond is also determined by it’s supply/demand.
In recent years, demand has dropped and supply has gone up. Which means they’re not as “special” as they once were. Add to that the idea that supply has been artificially suppressed by the big companies like de Beers and you start to wonder if it’s a good investment at all.
When it comes to diamond jewelry like engagement rings and diamond earrings & bracelets, the water is even murkier. A lot of times when you buy diamond jewelry, especially stuff that’s custom-made, it’s value is highest to you, the owner. Others may not find the same beauty/value in it.
Selling Your Diamond Jewelry Investment
Moreover, it’s kind of like buying a car in our opinion. You probably lose a large portion of it’s re-sale value once you drive it off the lot.
If you’ve ever tried selling a second-hand piece of diamond jewelry, you know that you’ll rarely ever get the same price you paid for it. That’s not to say it’s impossible. If you’re crafty enough and a good sales person we’re sure you could get a price close to what you paid for it.
So in terms of investment value, diamond jewelry may not be the best choice. It’s also not the worst choice.
On the other hand, loose diamonds may prove to be a more reliable form of value preservation. Oftentimes, you can sell diamonds to jewelers for a great price. But be careful, if you think you can buy a diamond at a retail price and sell it back to a jeweler at near the retail price, you’ll be disappointed.
Jewelers need to be able to make a profit from their products. So they simply can’t afford to buy diamonds at a retail price. They need to be able to mark it up to make any money, otherwise what’s the point?
So if you can get beautiful diamonds or diamond jewelry at a cheap or wholesale price, then you may be able to make some money from it.
On the other hand, that’s not really an investment but more of a business model.
So Should You Invest in Diamond Jewelry?
So all in all, if you’re asking is diamond jewelry a good investment, the answer’s likely what do you mean by “good.” Do you want to shine for a bit and then recoup most of your money? Then possibly, yes. Do you want to protect the value of your money by holding onto loose diamonds? Then maybe. Do you want to make a boat-load of money in a few years by investing in diamond jewelry and holding it? Then probably not.
Remember, we’re NOT financial advisors and can’t give you investment advice.
But… they say gold is a great investment vehicle, so why not diamonds? If you’re looking for a real answer, try speaking to a investment advisor that specializes in commodities, precious metals and the like. They’ll have a much better answer for you.