Diamonds Are Forever, But Do They Lose Their Value?

There’s an assumption that the rarer something is, the more value it holds. Since diamonds are expensive, they must be hard to find, especially when they’re larger, clearer, or hold more shine. While big, shiny diamonds are more costly than those that aren’t, diamonds aren’t rare at all.

Why Diamonds are Expensive Despite Their Commonality 

There was a point where diamonds were considered rare, but that’s no longer the case after 1870. Without the clever marketing slogan “diamonds are forever” invented by De Beers, there’s a good chance diamonds would have been demoted to semi-precious stones or worse.

Since the discovery of the South African diamond mines at the end of the 17th century, the actual value of the stone is purely based on marketing. Even an investment-grade diamond ring won’t offer you a large return on investment unless these stones become rare once more.

Should I Buy a Diamond Ring, Even If They Lose Their Value?

The price of diamonds has varied drastically over the years, making them a poor investment choice. However, that doesn’t mean you shouldn’t buy a diamond ring. After all, diamond earrings and a white gold emerald engagement ring can make for an incredible present.

People don’t buy fancy cars, clothing, or even jewelry because they hold on to their value; they buy them because they're associated with prowess and luxury. While diamonds can bring beauty and elegance to any outfit, they shouldn’t be bought for the purpose of reselling them.

Why Diamonds Aren’t Always a Good Investment

Plenty of industries mark up the price of their goods to make a profit; this isn’t unique to diamonds. When buying diamonds, make sure you’re doing so for the right reasons.

Diamonds Lose 25-50% of Their Value Immediately

Similar to a car, a diamond is a depreciating asset as it loses a large portion of its value after you buy it. Some diamonds can lose as much as 50% of their value immediately. While this doesn’t mean diamonds are worthless, it does mean you may not get what you paid for.

Diamonds Don’t Have an Intrinsic Value

An intrinsic value of something is a measure of how much an asset is worth. Since diamonds aren’t tied to anything, not even their rarity, their value is determined by market fluctuations and popularity. However, the gold and silver on the jewelry do have significant intrinsic value.

Diamonds Aren’t Rare and Can Degrade

As stated, diamonds aren’t rare. Some colored diamonds can be considered rare, but for the most part, diamonds are easy to find in comparison to other gems. While diamonds do last a very long time, they can crack, break, warp, yellow, and fog up if they’re handled poorly.

Diamonds Can be Lab-Grown and Treated

Authentic diamonds are considered more prized than lab-grown diamonds because they’re made by the earth. While it’s true natural diamonds are rarer than lab-grown, they look virtually the same. However, a real diamond will hold more value over time than a lab-grown version.

Diamonds Will Probably Always be Available 

At some point, naturally grown diamonds will disappear entirely or fall out of fashion. However, that’s probably going to take a really long time, considering celebrities and royals still treasure them. With this fact in mind, it’s unlikely diamonds will become scarce enough to turn a profit.

Diamonds Hold No Real Future Financial Value

Some investments are considered valuable because other people treasure them, including diamonds. Therefore, the future value of your diamonds isn’t certain. If you still want to invest in jewelry, we recommend diversifying your portfolio with stocks, bonds, and other securities.