De Beers Wants To Convince The Public That Diamonds Are A Good Investment
Are diamonds really a good investment? Yes and no. Rare stones, like that big blue diamond that sold for $9.5 million recently will always find their purchasers. Big stones, stones of unusual color or clarity, stones with a unique historical provenance, these stones will likely grow in value over time. These stones are not the norm however.
Anyone who has ever tried to sell back a diamond ring has probably been startled by the low price offered by retailers. There is a vast cavern between retail and wholesale diamond prices. One man even turned his quest to sell back his ex-fiancee's diamond ring into a jewelry resale website with the cheeky name of "I Do Now I Don't." Loose stones are a bit of a different matter but it still depends a lot on the size and rarity of the stone. The lack of an intrinsic public market price makes a diamond more akin to art or antiques in terms of value. The price is determined by what the market will bear.
Diamond prices have been stabilizing recently and the diamond trade has begun to feel a little bit of cautious optimis but the diamond industry is one that has been taking hits on all sides. The rise in personal electronics has eclipsed up some of the gift-driven jewelry business. Rises in production costs have nibbled away at profits. Lab-created diamonds exist as a specter on the horizon (an issue the gold market does not have to face). This is not the first time I've heard of a diamond investment fund but I still think that unless you are someone like Laurence Graff it's hard to make a fortune investing in stones. I believe diamonds are a bit like art, one should buy for the love of the piece not the promise of profit.