Diamonds can be forever jewellery, but are they financially smart? Many still wonder whether buying a diamond necklace, engagement ring, or diamond pendant is a smart financial move. On one hand, it’s a symbol of luxury and commitment; on the other, it's often a depreciating asset. So, is a diamond ring a good investment? Let’s break down the facts, risks, and smart alternatives.
The Truth About Diamonds as an Investment
Don’t Call a Diamond Ring an Investment
A diamond ring is a depreciating asset, just like a new phone or a new car, which loses value the moment it comes out of the showroom. A diamond ring or diamond chain typically sells for less than what you paid. Think about gold and silver as an investment. There is generally a 100-200% markup on the selling price of diamonds in most stores.
The Advantages of Owning Diamond Jewellery
So, if it’s not a financial asset, why buy one? Because its value isn’t just in money.
Storability & Longevity: Diamonds are compact and durable, making them easy to store, even high-value pieces fit in a small locker. As the hardest material on Earth, they’re built to last a lifetime with minimal care.
Symbol of love: A gold diamond necklace or an elegant engagement ring is more than jewellery; it’s a commitment and legacy, and shows that you truly love that person. Perfect as anniversary gifts or engagement rings for women, diamonds represent relationships that are meant to last.
Versatility: Diamonds are versatile and can be styled with any outfit, from basic to party wear. A delicate diamond necklace or a minimal pair of diamond earrings can enhance an everyday look. Their adaptability makes them perfect for weddings, work, and everything in between.
Diamonds may not double your bank account, but they double your joy, confidence, and emotional wealth.
The Disadvantages of Investing in Diamond Jewellery
Lack of Price Transparency: Unlike a gold chain or gold necklace, diamond pricing isn’t standardised. Markups vary wildly based on brand and seller.
Low Resale Value: Buying diamonds as an investment lacks tradability. Buying diamonds is easier than selling them. Some jewellers do buy them, but the price they are willing to pay will be less than the price you actually paid.
Common Buyer Mistakes: Paying too much, expecting too much, or buying the wrong stone. You need to have a lot of patience to get the benefits. Diamond jewellery is not great if you are looking for fast returns in a short time.
According to experts, unless you’re trading rare collectable stones, buying a diamond is more about emotion than investment.
Common Mistakes to Avoid While Investing in Diamond Jewellery
These are the common mistakes to avoid while investing in diamond jewellery:
1. Overpaying or rushing your decision
2. Assuming resale value will increase
3. Trusting certificates without research
4. Ignoring the 4C’s: cut, clarity, color, and carat
5. Skipping return/exchange policy comparisons
Pitfalls to Avoid
Purchasing diamond jewellery can be overwhelming, and mistakes may happen when emotions are overpowered. One of the biggest pitfalls is avoiding the 4 C’s: cut, clarity, carat, and color. Many consumers also think that buying a gold diamond necklace or a diamond pendant will increase in value, which isn't always true. Another mistake is buying from sellers who give a certificate of authenticity, leaving consumers with overpriced or fake stones. Lastly, hurrying into buying without comparing policies, pricing, and style may lead to regret later. Taking the time to educate yourself about the diamonds and shop carefully is the best way to avoid these pitfalls.
Should You Buy a Diamond Ring?
The answer to this depends on what you expect from your purchase. If you’re expecting financial returns, a diamond ring may not be the smart choice. Diamonds are depreciating assets; they don't appreciate the way property and gold do, and the resale value is often lower than the purchasing value. But if you aim to gift your loved ones, create a memory, or just own a piece that carries emotional weight, then a diamond ring is worth every value.
A gold diamond necklace, a diamond pendant, or even a ring may not increase the value faster, but they increase the value of emotions, joys, and personal meanings. In the end, buying a diamond ring isn’t about investment; it’s about a memory that will be treasured forever.
Tips to Buy a Diamond Engagement Ring
Engagement celebrations are precious moments filled with the excitement of taking the first step into a new chapter of life together. The most important part of the celebration is the excitement of choosing your engagement ring. As a symbol of love and commitment, the ring should be the one that meets the expectations.
Looking for the perfect diamond ring? To make a smart purchase, you'll need to know these tips.
1. Know the Shape vs. Cut Style
Before buying a diamond ring for an engagement, it's essential to understand the difference between its shape and cutting styles. The most common shape of a diamond is round, but there are other fancy shapes, which include pear, oval, square, heart, and marquise.
(Tip: round-shaped diamonds are the most expensive ones; try purchasing fancy shapes to save money.)
Cutting styles generally refer to how the facets of diamonds are arranged. The brilliant cut is famous because it maximizes the brightness of the diamond. This type of cut can be seen on various shapes, like round, square, and oval. The most famous shape and cut style is round, which has 57 or 58 facets.
2. Understand the 4C’s of Diamond Grading
Diamond graduation is the method of checking the quality and establishment of the diamond. Diamonds are graded according to the 4 C’s: cut, clarity, colour, and carat.
Cut: The quality of the cut shows how it interacts with light. A diamond's perfect proportions, polish, and symmetry determine its brilliance, sparkle, and flash colours.
Clarity: The clarity of the diamond refers to the absence of internal features, that is, inclusions and surface irregularities called blemishes.
Colour: Colour is usually graded on a scale of D to Z, in which D means the diamond is colourless and Z means the diamond has brown or light yellow shades. Diamonds with less colour are the rarest.
Carat: The carat weight determines a diamond's size. Diamonds with greater carat weight are rarer and more valuable.
3. Pick a reputable jeweller
Considering where you want to purchase your engagement ring is equally important. There are multiple online and offline options available in the market; it's necessary to select one that you trust.
4. Check the Return/Exchange Policy
It's always better to have a backup plan. Evaluate the return or exchange policy of the jeweller before finalizing the purchase. Think about what if your partner is not satisfied with the ring you selected. In such situations, an exchange policy can be a lifesaver.
The Modern Alternative: Lab-Grown Diamonds (LGD)
This is where the conversation changes. Lab grown diamonds are not replicas; they are real diamonds created in labs using modern technology, identical in shine, durability, and shape to the mined ones, but with affordable pricing and environmental consciousness. They cost significantly less (so you can get more carats in your budget), are debate-free, sustainable, and open up multiple possibilities in jewellery designs. That means you can own a stunning diamond necklace, chain, or ring that looks and lasts like a naturally mined diamond but feels like a far smarter choice.
At Palmonas, our lab-grown diamond jewellery brings you the combination of affordability, elegance, and environmental concerns. Explore our:
Celestical Dot 9KT 0.15 Carat Lab-Grown Diamond Necklace
Solar Gleam 9KT 0.05 Carat Lab-Grown Diamond Necklace
Modern Twist 0.64 Carat Lab-Grown Diamond Ring
Floral Bliss 0.08 Carat Lab-Grown Diamond Ring
With LGDs, you can invest in smarter jewellery you’ll wear proudly, knowing it’s beautiful, ethical, and durable.
Explore the best lab-grown diamond collection in Palmonas and buy the best sustainable engagement ring. You can also shop online or visit our nearest stores.
FAQ’s
1. Do diamond rings increase in value?
There are misconceptions that diamonds are rare and become more valuable over time. But the majority of diamonds are not investments, as their resale value is lower than the purchase value. When reselling a diamond, you can expect 25% to 50% of its retail value.
2. Is it better to invest in gold or diamonds?
Gold offers a higher and reliable resale price than diamonds. Diamonds have lower resale value, as they lose their worth after initial purchase.
3. What is the 3-month ring rule?
The 3-month ring rule became popular through social media and marketing campaigns, suggesting spending your 3-month salary on your engagement ring.
4. What is the best way to buy a diamond ring?
The Best way is to know the 4 C’s, the diamond’s cut, shape, style and size
