Are Diamonds a Good Investment?

I get this question a lot. A whole lot.

Well… let’s start by figuring out what kind of good investment we’re talking about. A safe and sensible car is a good investment for me to make for my daughter in college. It’s not going to earn the money needed to pay her tuition. On a ring that’s going to cinch the deal for the rest of your life, a diamond is a good investment.

But what about for retirement?

What about savings for a house?

Investing in diamonds can make sense for some, but it's important to consider the risks and do your research first. YOUR research. I’m not an investment advisor. I’m just telling you my opinion. I’ll give it to you now. Buy diamond jewelry because you want to wear it and not for any other reason. Any financial gain should be thought of as a bonus. 

Pros of Investing in Diamonds

Diamonds have been a good long-term investment because they tend to maintain or increase in value over time. They are also portable, rare, and can be a good way to store wealth. Diamonds are also considered inflation-proof because their value tends to increase with inflation. This is the standard logic. For many centuries, jewelry was how wealth was kept (and hidden.)

Cons of Investing in Diamonds

The resale value of diamonds can be less predictable than other investments like stocks, real estate, or bullion. The price of diamonds can fluctuate based on market demand, interest rates, economic conditions, and fashion trends. Furthermore, lab diamonds are making inroads into the market. At present, only a scientist can tell the difference between natural and lab grown diamonds. This is a simple supply and demand issue. There are more diamonds available and that will just continue. The higher the supply, the lower the prices.

If you have diamond jewelry you’d like to sell in San Diego, give me a call. I always do my best to create win-win situations. I can promise you I’ll do all I can to get you a fair deal.

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