Find your diamond
Find your jewelry
shape
carat
color
clarity

Invest in diamonds!!!

Rockdiamond

Rockdiamond

Super_Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
10,195
As many times as this has been covered, I feel it's crucial to reiterate the facts:
1) it's easy to buy diamonds
2) it's very difficult to sell them for whatever price you paid, or more.

I read newsletters from many of the sites selling diamonds.
Today I read a book on how diamonds are such a great investment opportunity!

All kinds of info on how certain diamonds had jumped from $5million to $10 million in less than 10 years (I'm making up these numbers, but the examples were similar).
And after all the hoopla ( pages and pages)....one simple paragraph about how to sell these amazing "investments"...with ZERO details on how to accomplish this feat.

Our industry is about love...attraction...art...beauty......
Me personally? I could never imagine being a doctor and having to deal with the sort of issues that physicians do.

Diamonds are fun!

BUT- part of what attracted me to diamonds over the years is the inherent trust people place in each other.
Your word is your bond.
It's a crucial element of the diamond business.
So, when I see well-established companies promoting clearly deceptive ideas....it just hurts- and spurs me to remind everyone.
BUY DIAMONDS FOR LOVE. They are NOT financial investments.
 
Many of us purchase diamonds with our disposable income—as we we would other frivolous items. Some of us only purchase preloved. There is a huge secondary market where we can then unload these frivolous purchases for even money, a profit if you are a savvy IG seller, or a minimal loss when we tire of them and move on to the next diamond. I find it’s more difficult to unload other frivolous purchases so while I don’t consider them an investment, I don’t think purchasing diamonds is a waste of money. It’s a FUN expenditure and experience! I mean. Who enjoys the process of spending money on tires? Or other necessities? I actually enjoy the process of shopping and owning and wearing and it’s reassuring that I can unload my diamond if I ever have to.
 
Last edited:
White diamonds I agree are not so great but pinks blue and red diamonds have gone up over the years
 
yashthejeweler said:
White diamonds I agree are not so great but pinks blue and red diamonds have gone up over the years
Click to expand...

Actually, by the barometer of wholesale prices- high end colorless diamonds have steadily increased over the years too.
Hard to say which has increased more, but the same rules apply. Wholesale price increases don't equate to a good consumer investment- from a purely financial standpoint.
A consumer who bought a red diamond 15 years ago might not even get their initial investment back. From where I sit, the wholesale price of Argyle Red Diamonds under $1mil hasn't really moved all that much. Maybe $10 million dollar stones are in a different category.
And, there are plenty of red diamonds available online right now.
A private seller would have to compete against those if trying to sell privately- which in itself is a daunting proposition.
Auction maybe? Hefty commissions and you have to wait for the auction to have a potential sale...it's not a liquid asset... unless the seller is willing to sell below wholesale.
There are positive aspects when joy of ownership is combined with the financial aspects.... Diamonds do hold value better than many other things consumers buy.
If you'd bought a Lamborgini for a quarter mil 10 years ago, you'd lose a lot more selling for cash today, than you would on a Red diamond purchased 10 years ago. But in either case, there's going to be a loss of capital if you needed to liquidate.
 
Well said thank you so much. I just feel there are certain items out there that can be seen as a good investment that can beat the s and p 500 returns. I also feel if a painting drawn up by someone can go for hundreds of millions of dollars , these red and blue and pink diamonds should also be much higher. It takes millions of years for such stones to exist.
 
Good thread.
I paid a lady A$22k for 5 pink diamonds (one was broken in half so really only 4).
She paid A$5k retail for the ring in 2000.
This has been an exceptional case as the same white diamond ring would have cost more back then because we had a much higher luxury goods tax.
 
yashthejeweler said:
I also feel if a painting drawn up by someone can go for hundreds of millions of dollars , these red and blue and pink diamonds should also be much higher. It takes millions of years for such stones to exist.
Click to expand...

Same with granite.
 
Garry H (Cut Nut) said:
I paid a lady A$22k for 5 pink diamonds (one was broken in half so really only 4).
She paid A$5k retail for the ring in 2000.
Click to expand...

Four-fold increase. Plain ol' vanilla US SP500 would have given nearly five-fold -- and that's after the recent drop. Even these "great success" (with apologies to Borat) stories are not much to brag about. Yes, they "have gone up" -- but compared to what? Absent a benchmark or a control for inflation, nothing should be concluded.
 
@Rockdiamond ,
Timely thread David. It was in the late 70's and early 1980's, another time of rapid inflation, that we saw this big push around promotion of gemstones as investments to consumers. While some sharpies did well by working with the right people, a whole lot of people got taken advantage of by unscrupulous actors.

I lost count of all the people who came to my office wanting to cash out their 'investments'. It was depressing to have to give bad news to so many people about the value of their gems. And it made me angry that most jewelers were honest but these boiler room scammers were giving the trade a horrible name.

Every single customer that they fleeced, and there were thousands upon thousands, are people who will never buy a diamond or gemstone again, and who will advise their friends likewise.
 
Garry H (Cut Nut) said:
Good thread.
I paid a lady A$22k for 5 pink diamonds (one was broken in half so really only 4).
She paid A$5k retail for the ring in 2000.
This has been an exceptional case as the same white diamond ring would have cost more back then because we had a much higher luxury goods tax.
Click to expand...

A broken clock is correct twice a day....I really don't get the point.
Has it ever happened that a consumer bought diamonds and re-sold them at a profit????...surely. Stranger things have happened.... but it's so exceedingly rare, it's not even an outlier.
 
Last edited:
Thanks @Texas Leaguer
I know we're on the same side of this issue- and it sounds like your frustration at seeing this bad behavior is akin to mine...
 
I did, but it was fancy colour stones.
 
hiratop said:
I did, but it was fancy colour stones.
Click to expand...

I've got a safe full of those...as do many cutter/dealer friends of mine.......I love to own them!
Selling them????
That requires well over 40 hours per week- and has been that way for ....forever.
 
Hi,

Reading comments like these reminds me that for years people thought their diamonds were heirlooms to be passed from generation to generation. Thus, no matter the size or stats of their diamonds people kept their diamonds as treasures, not only for the beauty, but for the value they thought they had. And this type of thinking was encouraged by DeBeers, so that the market would not be flooded with material that might reflect what market conditions would actually value these diamonds or even gemstones at.

We now have different outlets for trying to sell our diamonds and come to realize that they do not have the value previously thought. In addition, DeBeers has lessened its hold on the diamond market and people are now told to buy for beauty. But for many years diamonds were implicitly thought to have high monetary value. Some truth telling and lessened control in the diamond market have brought realty to the fore.

Annette
 
Rockdiamond said:
...
Has it ever happened that a consumer bought diamonds and re-sold them at a profit????...surely. Stranger things have happened.... but it's so exceedingly rare, it's not even an outlier.
Click to expand...

FWIW years back I bought that GIA 2.26 carat F VVS2 asscher for around 27K.
Years later I sold it (on consignment) for around 42K, before commission.

Honest!
Just extremely lucky timing as the diamond market changed.
Apparently I bought at a dip, and sold at a peak.
I take no credit - just random dumb luck.

But of course I agree that, for consumers, diamonds are a horrible "investment". :knockout:
Mostly because (unlike an ounce of gold) we have to pay retail prices and sell at wholesale prices.
If wholesale is half of retail, values must double to just break even. :doh::doh::doh:
So much for the "investment".
 
Last edited:
kenny said:
FWIW years back I bought that GIA 2.26 carat F VVS2 asscher for around 27K.
Years later I sold it (on consignment) for around 42K, before commission.
Click to expand...

An exception to prove the rule…You rock Kenny!!!!
I'd also add that the Pricescope community can lessen the negative effects of consumer resale- to a degree.
IF someone is selling a PS vetted stone/piece on Loupe Troop....it's probably a far better recovery than eBay, for example.
But we're still talking about a loss in virtually all re-sale cases.
I thought of this example:
Say the smartest dealer/cutter in the world went out with $100k cash in hand and bought some really desirable goods.
Then, the next day they needed their hunned grand back.....guess what?
If they were forced to sell that $100k for cash, they'd be forced to accept probably $90k...or less.
 
It is quite refreshing for you, as a member of the trade, to say this, David (Rockdiamond).

I see/read so many comments across numerous forums and social media platforms from consumers poo-poo'ing others for wanting to get advice on finding LGD, Moissy, or even simulants because they still hold on to and preach the false notion that EGD should be the ONLY consideration based on value retainment.

Even when it's spelled out to them that they are buying at retail now and have to wait (likely decades) for future *wholesale* value to catch up to today's retail value just to break even...not accounting for finding a buyer and potential other losses such as auction/listing fees if they must go that route...they still push the notion.

The only viable way to buy any diamond (EGD or LGD, alike) if retained value is a priority is to purchase from a seller that has a healthy trade-in program.

I've even heard the reasoning along the lines of "well, if something really bad happens and the money is needed, then at least an EGD will provide some emergency money."
To which my initial thought always is: If that is truly a concern, then leave the money in the bank and immediately stop shopping for a diamond, because the diamond is being purchased for all the wrong reasons. It's a symbolic luxury item, not a disaster recovery fund and no amount of mental gymnastics is ever going to change that.
 
Thank you Deja. I very much appreciate your words...but ( you there was a but, right...hehe)
DejaWiz said:
I've even heard the reasoning along the lines of "well, if something really bad happens and the money is needed, then at least an EGD will provide some emergency money."
Click to expand...
On this point.....I do think that the value retention of diamonds- both Lab Grown, and Earth Mined- is a real and positive feature.
Say someone had spent $25k on either a Lab Grown ( say 5ct D/VS) or a Natural ( 2ct G/VS)...and something bad happened.
Say the person really needs cash.
Even if they could easily recover $10k.....that might mean a real difference. That's the thing- it's so easy to sell a diamond on 47th street....... there are always cash buyers waiting. Vulture-like buyers.....they do make selling easy. Getting a fair price is hard...but again- even at really low offers, there's still some serious money.
So lets' not throw out the baby with the bathwater:)
 
As others have mentioned David, Colored diamonds can be exceptional cases. White diamonds - no!
We are in agreement Mate ;-)
 
David,

I saw your title and came prepared to start another of our vociferous “disagreements”.

Dang! I really hate to have to agree with you so completely. It just feels wrong.

Will you please say something I can disagree with, I won’t be able to sleep well until you do.
 
Wink:
I've heard that there are only two kinds of guys coming out of Idaho....

bwhahahaha ( An Officer and a Gentlemen reference)

Seriously- we agree on far more than we disagree on....though it might not have always seemed that way....
 
Last edited:
Rockdiamond said:
Wink:
I've heard that there are only two kinds of guys coming out of Idaho....

bwhahahaha ( An Officer and a Gentlemen reference)

Seriously- we agree on far more than we disagree on....though it might not have always seemed that way....
Click to expand...

Possibly, but what fun is that?
 
@Wink
I think it does need to be said that we've known each other for about 20 years....and though we've had our diamond disagreements over the years, the overriding feature is respect. I have a lot of respect for the work you do, and how you've always been a gentleman.
 
Merci mon ami
 
Since I am already on record in this thread cautioning against consumers 'investing' in diamonds, I will now put on my 'white hat' to say this. In addition to the knowledge of diamonds and the diamond market that can be attained on this forum from the many sharp prosumers that @Rockdiamond alluded to, it should also be pointed out that historically margins were very, very different! Today, information technology and online buying has shrunk margins to the bare minimum. Therefore, it is much easier for a consumer who does a little homework to buy right.

And that is at least half the equation. Yes, you still need access to the market to sell, and without that you will not succeed. But there are also more avenues to selling today with different channels easily accessible to consumers.

@kenny is being overly modest giving full credit to luck for his profitable outcome. I would say his knowledge and good judgment should get a lot of credit too!
 
Thanks. TL. ;-)
 
smitcompton said:
We now have different outlets for trying to sell our diamonds and come to realize that they do not have the value previously thought.
Click to expand...

Great point Bryan.
I had meant to write something about this when I read Anette's post....
There's a big difference in retail today...and not because diamonds didn't have perceived value...rather the retail margin structure changed radically between about 2000 and 2010.
Back in the old days, "Keystone" was a common phrase referring to a 50% gross margin ( 100% markup). The jeweler used to buy a stone for $10k and sell it for $20k.
Today diamond sellers lucky to sell that same stone for $12500. The beneficiaries of this are consumers.
Plus, the internet provides additional avenues for consumers to sell diamonds.
Diamonds still aren't a sound financial investment for consumers ( regardless of the color)...but there's better retention of value than there was in years past.
 
I’m constantly looking for second hand diamonds but no clue where to find them. I’m looking for a Ideal cut .75- 1 carat G-H SI 1-VS2. Any suggestions?
 
You must log in or register to reply here.
GET 3 FREE HCA RESULTS JOIN THE FORUM. ASK FOR HELP
Jewelry Blog
PriceScope-Concierge-Ad
Find prime cuts.
Top