I recently followed an online discussion regarding the merits of diamonds, and this particular discussion revolved primarily around the falsehood and artificially created value of diamonds. One of the people posting to the thread pointed out that prices are controlled by the diamond syndicate, and without these controls, they’re just pretty rocks, and as such, are worthless. Someone else chimed in, saying that after their friend’s recent marriage failed, the woman tried to sell her engagement ring, and found that she could only get a fraction of what had been paid for it. A third person observed that her local jeweler offers to credit the full price paid for any ring they sell, although she admitted that she was not sure if the offer involved store credit or a full refund. Any number of people jumped on the bandwagon, one bringing up the (now obsolete) issue regarding “blood diamonds”— which apparently unknown to this person was largely resolved years back, by something called the Kimberly Process which documents the source of rough diamonds. (By the way, for nay-sayers who feel that these standards aren’t good enough, for the past 15 years or so, buyers have had the option of purchasing diamonds that not only originate, but are cut in Canada, and come with a pedigree, making the entire chain of events from the ground to the final product free of any possible conflict.)
It never ceases to amaze me how people can be so full of bluster and false confidence without actually being able to tell their elbow from … well, a rock in the ground. But I digress. The real story is that as a short-term investment, the purchase of a diamond would not be a good move. For more than ninety-nine percent of the general population, you’re buying at retail, and selling at below wholesale — however, the price of most fine-quality diamonds of at least engagement-ring size rises incrementally year after year, and it doesn’t really matter why the price goes up, only that it happens worldwide, and this occurs reliably, year after year. Yes, it’s controlled, but without the controls, the diamond market becomes a free-for all, and I do not mean “free” for all! In fact, the only time in the last hundred(+) years that the diamond market slipped the reigns (in the early 1980s), it was an unmitigated disaster for nearly everyone involved, and within a matter of months, prices skyrocketed to many times what they had been only a short time beforehand. What stopped it? The syndicate: DeBeers. Since its founding in the late 1800s, there had never been a series of events like this, and DeBeers was, in retrospect, slow to react — but react they did, and managed to stabilize the market after bringing it crashing back to very nearly where it started before the artificially-created inflation.
The fact of the matter is that there is virtually nothing besides a diamond that you can buy today, which will increase in value over time without having to pump money into it, pay yearly taxes on it, or do anything to it in the way of maintenance. Let me cite an example. Some years back, I was helping a jewelry store run a free jewelry evaluation clinic, when a woman came in with a large, fine quality diamond engagement ring, wanting to know the value. After an initial inquiry as to which value she wanted (it turned out to be insurance value, in this case), I inquired as to whether the ring was currently insured, and she said that it was. (OK, what is wrong with this picture? The ring was insured, but she didn’t know the value?) I asked when the ring was purchased, and the reply was 1965. I asked if there had ever been a formal written appraisal done at any time since then, and the answer was no, but she still had the original. If you know the history of the diamond market as well as I do, it is no great trick to figure out what a diamond of that description would have been sold for at the time, and an educated guess as to the 1965 cost of the ring (sans the large center diamond) brought me to a figure that she confirmed was within a few hundred dollars of what the original price would have been, which astonished her — but when I told her what the current insurance value was, she needed to sit down rather quickly. As a conservative figure, the value had gone up by more than twenty times over what the purchase price had been— and there was no big name retailer or jewelry designer involved. As it turned out, her insurance company had only marginally raised the coverage over a 40-year period, and she was still essentially insured for the 1965 price!
Anyway, the online discussion went on ad nauseam, with several diamond aficionados weighing in, and the diamond detractors digging in for a knock-down, drag-out fight, apparently for the sole benefit of my amusement — because neither side was able to make any headway at all! Of course, everyone is entitled to their opinion, but when all is said and done, fine quality diamonds are in and of themselves really beautiful, and hold a special place in our culture. Without having monetary considerations in the picture, when you’re all alone, and you look at a well-cut diamond of good quality, it’s stunning. It doesn’t have to impress anyone else for you to feel good about wearing a diamond or a piece of diamond jewelry. It’s not just that diamonds are pretty and sparkly, and it really has nothing to do with advertising. A well-cut cubic zirconia is pretty and sparkly, but the difference in the effect between “CZ” and the real thing is immeasurable. The French have a wonderful phrase for it: Je ne sais quoi, which Merriam-Webster defines as “something (such as an appealing quality) that cannot be adequately described or expressed.” Just so.