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Is 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.
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.
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.
Read 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.
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....
Read more...
Beware of Mall Jewelry and Other Expensive
Jewelry Stores
Common sense should suggest
that the only way such stores can make high profits is to cover all high
costs (of the glitter, lighting, display, advertising and aggressive
salespeople paid with high commissions on your sale) in your prices.
In today's commerce with the
rise of online shopping, these stores are facing stiff competition from
online stores that offer certified diamond jewelry of quality at lower
prices by keeping their operating costs down and being able to turn over
larger volume. Please take the time to compare prices, quality and and
take advantage of what eCommerce has to offer to you. You may find
better values at online stores instead of having to pay for the glitter
and high expenses or the mall jewelry stores.
Read more High Price Stores and
their Price Gimmicks...
Get to Know Diamonds
A symbol of innocence, justice, faith and strength, the diamond was
believed to make its wearers courageous and victorious over their enemies. When
set in gold and worn on the left side, it held the power to drive away
nightmares and soothe savage beasts. Diamonds were even thought to be so
powerful that they could stop lechery.
Diamonds have lured and
fascinated us for centuries. Their ores and lore recorded romantic and
bloody events in the past. Diamonds have been long cherished and sought
after, fought over and killed for in the human history simply because of
its beauty and the fascination....
Back to Diamond
Information Summary...
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Is a Diamond a Good Investment?
