In addition to being stunningly beautiful tokens of love, diamonds have enjoyed an enduring reputation as being a highly portable, highly liquid, and highly desirable asset. While not as predictable as gold or real estate as a hedge against inflation or as a safe haven for wealth, they nevertheless gave a sense of security to the owner. If personal or political fortunes took a turn for the worse, one could always flee the country and locate a discreet broker to handle a transaction that could transform the family jewels into a respectable nest egg.
This reliability was due to the rarity of diamonds, the supply of which is tightly regulated by the DeBeers cartel, and the fact that only nature could make a diamond, and that took a long, long time.
Now, not so much.
The diamond cartel may still control the supply of natural diamonds around the globe, but technology has once again ambushed another seemingly invincible market. ‘Lab grown diamonds’ now marketed to the masses by Pandora, among other vendors, portend a storm on the horizon: manufactured diamonds, just as ‘real’ as natural diamonds and offered at a fraction of the cost, are now a reality. And when you go into a jewelry store to look at diamond jewelry, there’s no way for you to know which one you’re buying, regardless of what the salesperson tells you. (They may not even know.) This does not bode well for the future price of diamonds, or any precious stone for that matter.
I encourage everyone to watch the Netflix/Showtime documentary ‘Nothing Lasts Forever‘ to discover the reality behind the marketing. Why? Because the chickens are finally coming home to roost.
In ‘The Old Money Book’ and ‘The Old Money Guide To Marriage’ I strongly suggested that young couples in love eschew the big diamond engagement ring and the big diamond wedding ring. I promoted simplicity, economy, and logic, and I expressed a preference for a simple gold or platinum band. The future of diamonds’ value, I believe, will confirm my wisdom.
If you want a similar example, read up on the history of pearls, and how ‘cultured’ pearls impacted the value of ‘natural’ pearls. Do you even know the difference today?
If not, that should tell you something, not just about the present state of pearls but about the future of diamonds.
They are not a girl’s best friend. They are not anyone’s best investment, and in fact are probably a horrible expenditure, especially for those young people just starting out in life.
Remember: nothing says ‘I love you’ like being smart with your money. Because one day, in the not too distant future, it may all be referred to as ‘costume jewelry.’
Enjoy the documentary.
- BGT
Interesting, and likely correct. But don’t forget that many old-money families have a stash of heirloom diamonds to be used for future generations’ wedding or engagement rings.
Good point Hudson. There’s a guideline established by De Beers that one should commit two months salary to the diamond engagement ring. I suspect if couples committed this amount instead to a stock market investment, they could put a child through college 18 years later.
When my now-husband and I first started talking about marriage, I was clear on two things:
1) I didn’t want a diamond engagement ring, both for the “that’s a waste of money” reasons and for the ethical reasons.
2) After a past broken “engagement” where the person I was dating wanted to call himself my fiancé but didn’t want to bother with any of the formalities whatsoever, I was quite insistent that there be a ring and a set wedding date for me to consider us engaged.
We went to a craft fair and bought a pair of silver rings with three amber stones, each a different shade, and both wore them as our engagement rings. Not the most durable choice, unfortunately, but served their purpose until we got our wedding rings (two-tone gold braided design, made from the same braid and then cut to the correct size).
We also had a comparatively inexpensive wedding in a state park, and prepared all food and drink except the wedding cake ourselves – the cake was a gift from a guest who had a family member who specialized in fancy cakes. 19 years later, we are still married and many of the people we knew who had fancy expensive weddings are not. Our philosophy was “invest in the marriage, not in the wedding” and I think it has paid off.
Sound advice (as usual). Admittedly, there have been times where it has crossed my mind (more than once) to purchase a diamond ring for my wife. However, there are more sensible things to plan for in mid-life. For instance, the Young Master’s college in just another four years. My wife’s understated engagement ring is slender gold with an aqua marine stone and two diamond chips. She wears and enjoys it daily. For wedding bands, we both wear very plain, thin gold rings. The arrangement seems to suit us tolerably well. We’ve been together almost 23 years and married for 17 by the way, and I would have married the Grand Duchess much sooner if she had consented. I was, as the late Peter Sellers put it in What’s New Pussycat? (1965), “Schmitten!”
Kind Regards,
Heinz-Ulrich
No less a location than Place Vendôme !
https://nationaljeweler.com/articles/5547-lab-grown-diamonds-land-at-place-vendome
Thank you for sharing your thoughts as well as the documentary, Byron. My husband and I just celebrated our 22nd anniversary. We just have plain white gold wedding bands, and I wear a pair of cultured pearl studs. Funny, I was recently thinking about getting a pair of small moissanite earrings for the reasons you’ve mentioned above (cost, value, ethics) since I don’t have access to a stash of heirloom diamonds.