How Would You Go About Collecting Diamonds?

[snaphappy]

I have diamond fever. So I'm not thinking rationally, haha!

But here's the idea rolling around in my head. Diamonds (and I prefer antique jewelry) are a great place to park some cash. Similar to real estate. Art. Exotic cars. Unlike cars or real estate, you don't pay taxes on diamonds. Diamonds don't need maintenance. They're cheap to insure with Jeweler Mutual. And most importantly, you get to enjoy them. Oh and you get to hunt them down - and humans love the thrill of the hunt! Two more things. If I buy a diamond for $5k, whether I overpay or underpay a little, it's still going to be worth ca. $5k tomorrow. And given enough time, the diamond will appreciate in value. There are nuances, I get it, trends change, etc. But if I sit on a diamond for two decades it's going to go up. Ok you guys get it.

So my question really is - how do you guys go about collecting diamonds? It might be neat to buy one of every cut, GIA certified, loose, and just have them in cases on my desk. Have any of you collected loose diamonds?

Then there's jewelry. We can wear it. So that's more fun! But my goal is diamonds, not jewelry. For example, my wife and I started looking at early 20th century earrings and bracelets... we didn't like all the little diamonds. So I guess that would leave us collecting engagement rings, maybe stud earrings? So if you were collecting antique jewelry and you wanted to accumulate diamonds 1-3 carat, how would you go about it?

I'd also like to hear from you guys and let me know if this ill-advised? Are there flaws in the way I'm thinking? Since I have diamond fever I doubt I'm being rational!! Ha!

 

[Dreamer_D]

Diamonds do not hold their value. As a regular consumer, not a professional, the problem is attempting resale. Usually, you can only resell for a fraction of retail value. And you would need either the reputation to attract buyers or you would need to use a consigner eating into your profits.

When people talk about using diamonds or gems as investments they are usually referring to the million dollar truly unique specimens. Which do seem to hold their value better. But not the types of things us mere mortals can buy.

The only way this math works if is you are skilled enough to find true deals. Which takes a lot of time and effort. And even then the problem would be resale and finding a buyer.

Point being: we collect because we love gems not as an investment.

 

[MissGotRocks]

I would never buy diamonds strictly for investment purposes and I doubt anyone else would advise you to do so either. Buying and wearing them for your own enjoyment is really what it is all about. Natural diamonds may or may not appreciate over time. Even if they appreciate, they are not always easy to sell. Some people do buy loose stones to set or maybe add to later for a special jewelry piece. I have never wanted to buy diamonds to store in a case, or to play with from time to time. If you buy diamonds from a retailer, you will pay sales tax if your state is one of the many that now require it. Insurance can be expensive as well so again, would not advise buying diamonds just for the sake of having them.
If buying for a piece of jewelry that will be worn and appreciated, no problem. You will incur the initial cost and yearly insurance. Those costs many would agree are totally worth it for the enjoyment you receive in wearing it. For any other reason, I would not consider buying them.

 

[snaphappy]

Well one moment. I’m not interested in flipping or selling diamonds. I’m interested in holding them 20-30 years. They will increase in value inevitably, just from inflation if nothing else. No different than a valuable baseball card or a classic car, or real estate. I don’t think there’s any question about gold and diamonds appreciating over a few decades.

 

[Rockdiamond]

I don’t think there’s any question about gold and diamonds appreciating over a few decades

Hi snap!!
Speaking as someone who’s been investing in diamonds for more than 30 years….. your assumptions are incorrect.
I have stones in the safe which are worth less than when we bought them 15 years ago.
For the bulk of my career as a diamond dealer, we were able to realize profit on investments made in diamonds.
But a consumer would have had far less advantages at the time of purchase.
We purchased large parcels of diamonds, and had months to pay.
Being a lifetime diamond grader… I was in stronger position to know what to buy- and the value…. and knew what to skip.
You did hit on what I find to be the best sort of attitude on diamonds. They are an investment in yourself.
They do hold value better than most consumer purchases- but selling them is very difficult. Buy what you love!!

 

[Dreamer_D]

Maybe not. Diamond prices today are lower than they were 20 years ago. And in the 70s they were sky high.

Fine gems and jewels only become true investments if they are incredibly rare varieties.

Only very rare baseball cards and cars truly hold their value either. And sometimes collectibles crash. Look at beanie babies.

 

[Dreamer_D]

There are exceptions to this rule. I purchased all my diamonds at very low prices from scouring the market often for years before buying each one. Because I paid so little relative to current market value I suspect I could possibly resell them for close to what I paid. I think in 20 years they could hold or not lose too much value. That’s still not an “investment”.

 

[Rockdiamond]

Because I paid so little relative to current market value I suspect I could possibly resell them for close to what I paid.

I’ll bet it’s a very desirable collection!
And likely easier to sell than badly cut stones…..
but selling a diamond worth thousands of dollars is never easy.
People who buy diamonds from consumers use this fact as leverage.
“Sure, this D/VS1 is worth $20k. Buy”t I’ve got $10k in cash ready to go if you’d like to sell. Otherwise, try eBay”

They know how hard it is to facilitate at $20,000 sale.
Is the buyer going to pay in advance? Why would they if the seller isn’t a well established business.
So now the seller is forced to meet the buyer someplace where everyone feels safe. It’s tough selling expensive diamonds.

 

[snaphappy]

I’ll bet it’s a very desirable collection!
And likely easier to sell than badly cut stones…..
but selling a diamond worth thousands of dollars is never easy.
People who buy diamonds from consumers use this fact as leverage.
“Sure, this D/VS1 is worth $20k. Buy”t I’ve got $10k in cash ready to go if you’d like to sell. Otherwise, try eBay”

They know how hard it is to facilitate at $20,000 sale.
Is the buyer going to pay in advance? Why would they if the seller isn’t a well established business.
So now the seller is forced to meet the buyer someplace where everyone feels safe. It’s tough selling expensive diamonds.

Do you think it’s an easier for something that’s $5-$10k?

Maybe classic cars are easier to find buyers for… still all the same bargaining and awkward wiring of money. But maybe the classic car market just has more buyers

 

[Rockdiamond]

Do you think it’s an easier for something that’s $5-$10k?

Ummmm
$5000 is a lot of money to me. Classic cars are in a totally different category IMO
They are registered- they don’t fit in your pocket …. Generally an easier, safer transaction

 

[Tonks]

I have diamond fever. So I'm not thinking rationally, haha!

Every single one of us on this board understands diamond fever. And I can’t imagine there is a single person here who would advise this course of action. Period. This is not the way.

Take that 5 or 10k and invest. Get a good financial advisor. Invest more. Pay down debt. When you have 5 or 10k in investment income and *you do not need it for anything else*, then go crazy with your diamond fever. But never look at diamonds for investments. If you’re in the trade and can buy at wholesale, maaaaaaybe but honestly, diamond prices are incredibly erratic and unreliable right now. The introduction of lab diamonds has turned the market on its head and no one knows what it will look like a few years from now.

Use only cash that you can afford to use for a hobby to purchase stones. My personal view: do not park cash in jewelry. Buy it because you love it and want to enjoy it, perhaps pass it down. I cannot tell you how many times I see women in mom groups devastated because they cannot sell engagement rings for more than 1/4 of what they paid 20 years ago.

 

[MissGotRocks]

Well one moment. I’m not interested in flipping or selling diamonds. I’m interested in holding them 20-30 years. They will increase in value inevitably, just from inflation if nothing else. No different than a valuable baseball card or a classic car, or real estate. I don’t think there’s any question about gold and diamonds appreciating over a few decades.

There is a lot of question about appreciation on diamonds. The market has been all over the place for many years for various reasons. Today’s market has been influenced by COVID, sanctions against Russia for their diamonds, and the emergence of lab diamonds. All have heavily influenced price and now we have the issue of tariffs. No way to know where that tale ends up. If your line of thinking was correct, many here would be doing it. No one is and there is always truth in numbers. Don’t invest money based on what you think will happen with no concrete evidence to back up your thoughts. Gold may be another issue, but this is more the time to liquidate gold than it is to purchase it at its all time high price.

 

[lavenderdragonfly23]

I was going to say feet pics? But I realize that’s not the answer you were looking for

Buy to enjoy. Diamonds aren’t a great vehicle as an investment so to speak. That said, I will say, admiring mine has brought me more joy than any therapist, so it’s safe to say they are multitaskers