Are Diamonds a Good Investment?
It’s a myth and a message that has been pushed on us for as long I can remember. “It is an investment piece” the jeweller will tell you as you are purchasing your engagement ring. As recently as January 2023 I read an - in my opinion highly misguided - article in Forbes stating that diamonds were a hard asset that are stable and not prone to the fluctuations of crypto currencies. The article went further to say that diamonds “are a commodity, a natural resource and universally understood/accepted as a currency.”
Natural diamond prices are not stable. In 2023 I watched on the trade side as natural diamond prices plummeted in most categories by around 40% as they began to compete with laboratory grown diamonds. Similarly, laboratory grown diamonds have come down hugely in price since their inception as gem quality. Natural diamond prices are likely to recover as some point, but to suggest diamond prices are stable is completely wrong. As for being “universally accepted as a currency” - I probably do not need to explain why that part is not true in practicality and reality.
The truth is that there are a tiny percentage of natural diamonds that are an investment, but this coveted title is held for fancy coloured diamonds (especially pinks since the Argyle mine closed) or very large, unique stones that are the highest colours and clarities. We are talking about diamonds that cost from the hundreds of thousands and into the millions. Not the diamonds being bought daily for engagement rings.
There is a second hand market for diamond rings and this means that if you bought a diamond engagement ring for £8’000 and were going to try and sell it to a jeweller/pawnshop in a few years, you would be pretty lucky to get even 50% of that back.
Diamonds are quite simply, a terrible investment. Cherish them for what they truly are - deep sentiment, emotion, memories and something beautiful to be worn daily - and they'll become an heirloom that narrates the story of your love for generations to come.