For our anniversary I want to buy my wife diamond earrings. I bought her a lab made diamond bracelet in the past and she loved it, but said that she would rather have earth made diamonds because she wants it to retain value to pass on to our daughter.
Looking online I see many sites from jewelers that confirm what she claims, but I do not trust their bias. Is it true that man made diamonds that are considered ‘perfect’ are worth less in the long run compared to their earthen made brethren?
In: 1669
Use the money to open an account with index funds in your daughter’s name, and don’t look at it until she gets married. This will hold a lot more value than a piece of stone that no one cares about anymore.
What’s going to matter to your daughter is that the diamonds came from mom and you gave them to mom.
The history.
If she wants you to buy her something that will retain/increase in value to pass down to your daughter, get her a savings bond. If she wants something pretty for her ears, get whatever, doesn’t matter.
Diamonds are not an investment, natural or man made. If she wants an investment for your daughter, set up an actual investment account.
The value of a family heirloom is the family part. Unless her goal is that the daughter should resell it for 60% of what she paid. as that is the value earth made diamonds retain after leaving the case.
Diamonds aren’t investments. Period. There you go.
Lab made or mined means nothing. As soon as you buy it, it’ll lose somewhere between 10-50% of it’s value, and it will never increase in value.
Some reasons diamonds in general don’t retain value:
* There’s no shortage of supply. They’re not that rare, and they’re relatively easy to make (at least for the price we charge for them).
* They’re not practically reusable (at their high price point) except for in jewelry, and there’s a stigma against reuse.
* Jewelers make more money turning over new diamonds than they would by buying back older diamonds.
* Jewelers are the only ones who will buy diamonds. There’s no used market for diamonds like there are for cars, because it’s too easy for a buyer to get conned with an imitation. This means jewelers dictate the price.
So why might lab diamonds be worth less on the resale market? Look no farther than the last reason. Jewelers are the only buyers, so only jewelers dictate the price. Jewelers are already being undercut by lab made diamond jewelry.
A lab diamond company could buy-back and re-shelve merchandise, but if you’ve ever looked into buying lab made diamonds online, it’s pretty clear there is zero shortage of product in their catalog.
Lets get to the more applicable point though:
Why does it need to retain value in order to pass it along?
If you pass any earrings to your daughter, she’ll value them for sentimental reasons. Unless you’re literally planning for her to pawn them someday, they don’t need to retain *any* monetary value.
Gemologist here with 40 yrs experience and about 6yrs selling lab-grown diamonds. What jewelers and diamond dealers won’t tell you is a used natural diamond will typically fetch 50% to 75% of it’s current WHOLESALE value when you sell or trade it.
Lab-grown stones are still dropping in price as the makers of them (mostly in India and China) figure out how to create them for less money. The prices for lab-grown have fallen close to a whopping 80% in 6 years! This is as the product matures in the marketplace, economies of scale have answered the call and have accepted them as a bona-fide product, and more companies are producing them than were back in 2016-2018.
What I tell my customers is to buy a fine quality lab grown diamond of G color +, VS2+ (they’re not all fine quality),Excellent or Ideal cut (if round brilliant cut), and as large as you want. Future expectation of value doesn’t really mean much because 1. You’ll lose WAY MORE MONEY if buying a natural stone because diamond prices tend to drop a lot, but people in the business won’t admit it), and 2. Lab grown prices are the lowest they’ve been now ever, so you won’t be spending much, and there IS a secondary market for them. You can typically get 1/3rd to 1/2 of what you paid, as long as you purchased it at or near the bottom of the current market (in 2023), as we feel prices have or will finally stabilize from this point forward. Lastly, NEVER buy a lab-grown diamond unless it’s accompanied by an I sdependent lab report (GIA, IGI, GCAL) and it must have a laser-inscription on it’s girdle. Without an independent report, you cannot get insurance!
You want something that has both intrinsic/lasting monetary value and is traditionally viewed as being beautiful, buy her a gently used steel Rolex. Could have a few diamonds in the bezel or on the face/markers. It will almost certainly appreciate in value or at least hold serve with inflation. In some markets, it might even outpace it. (Women’s stainless Rolexes don’t perform nearly as well in resale as men’s do, but they’re still a better bet than a diamond ring).
Diamonds are carbon. Carbon is the 3rd most plentiful element in the universe. Diamonds are not rare. Their “value” is exactly what someone is willing to pay for it. The high prices for diamonds are because globally, diamond suppliers work to artificially restrict the supply of diamonds to keep demand high.
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