Are diamonds good investments? In fact, are diamonds investments?
Diamonds were never truly investments in the first place, and the very idea that they could be regarded as such is a carefully constructed marketing myth.
The recent attention to the Diamond Standard Index’s lacklustre performance over 22 years might seem like news. However, it merely confirms what smart savers have known all along, that the diamond market is unlike any other investment market. The basic principle of any investment is not just its quoted price, but the realisability of this price, that is, what you can get when you want to sell it.
With diamonds, this gap between theory and reality is rather wide, to put it mildly. This peculiar nature of diamonds isn’t accidental; it’s by design. The story goes back to 1870, when massive diamond discoveries in South Africa threatened to destroy the gem’s value forever. The solution? Create a monopoly—which became De Beers—to control supply and prices. The real masterstroke came in 1938, when Harry Oppenheimer, the founder’s son, launched one of history’s most successful marketing campaigns, transforming diamonds from mere precious stones to supposed symbols of eternal love and value.
The campaign didn’t just sell diamonds; it sold the idea that diamonds should never be sold. The famous slogan, ‘A diamond is forever’, wasn’t just romantic poetry; it was a brilliant strategy to prevent a secondary market that could reveal the true economics of diamond ownership. After all, if no one sells diamonds, no one can discover how little they’re worth on resale.
Today’s
