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Is jewelry a waste of money? Is buying jewelry an investment?

Updated: May 22, 2020

This is a question I hear all the time. In our jewelry buying department we come across lots of

different types of customers that are looking to sell their old jewelry. Whether it is a piece they inherited, are in need of cash or a ring that carries bad memories from a previous marriage or in some rare cases an item they've bought from a jeweler who told them that it is a piece that will increase in value over time. I always had a problem with jewelers making promises for the benefit of making a buck. 999 out 1000 times you will lose money when you resell your jewelry you've purchase from a retail store. There are lot of factors that are applied to products that are being purchased in a retail setting. Cost of goods + cost of labor + mark up (profit) + insurance + sales tax etc.. Combination of these things will make it nearly impossible to turn into profit after it is purchased.


Jewelry is an emotional purchase that often has sentiment attached to it. Just as often we see inherited pieces being sold, we also see inherited diamonds being remounted or restored for the use of a proposal of the next generation of that family. We see rings & diamonds that are over 100 years old and still have use and while maintaining some value. There are very few things you can buy and have use for generations. "Diamonds are forever" was a huge success as an advertising slogan that was used by larger diamond company interest. Diamonds are very durable, as a matter of fact on the Mohs 10-point hardness scale, a diamond is rated 10. It is the hardest mineral known to man. A damaged (i.e. chipped, abbreviated) diamond can be recut, repolished & repaired with some carat weight loss.


History shows the increase in price of gold, currently priced at $1742 per oz. with over 500% increase since the year 2000 and data shows the prices of diamonds over the past ten years have increased by approximately 32-33%, giving it an average of 4% every year. It is all relative to inflation, value of $, supply and demand of a product. Diamond traders use a pricing guide known as the Rapaport sheet that gives suppliers a guideline of value of diamonds based on shape, carat, color & clarity combinations. All of these prices are relative to the current cost of products being sold in the marketplace. So in theory if you sold a 3 carat solitaire diamond you had purchased 50 years ago in today's market you will make a profit, however you will never be able to replace that diamond for had bought from 50 years ago.


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