Are Diamonds A Good Investment? (ALL You Need To Know)

Last Updated on April 20, 2022

It’s not hard to understand why diamonds are one of the most popular stones of all time. With a luxurious sparkle and unparalleled beauty, diamonds are both elegant and timeless.

But when purchasing diamonds it’s common to wonder if your investment is well spent.


Are Diamonds a Good Investment?

Yes, diamonds are a good investment. But there are a variety of factors that come into play when deciding to invest in a diamond.

Although diamonds are a timeless and classic stone, that doesn’t mean that market rates don’t fluctuate. While now might be a good time to invest in a diamond, that may not always be the case.

Luckily, diamonds will always remain a popular item but that doesn’t mean the choice to invest in a diamond is for everyone.

Do Diamonds Hold Their Value?

The short answer is yes and no.

On one hand, diamonds are considered one of the most precious stones in the jewelry industry. Diamonds are popular, timeless, and will likely never be replaced by another stone for bridal jewelry.

However, diamonds tend to appreciate slowly and don’t always remain valuable over the course of the investment. But, that doesn’t mean a diamond isn’t a good personal investment.

What’s important to understand when investing in diamonds is that although diamonds will be popular for the foreseeable future, they are notoriously difficult to resell.

Because of this, buyers should carefully consider their options before investing in a diamond.

Do Diamonds Appreciate In Value?

Currently, diamonds have appreciated by 33% over the last decade. However, standard diamonds do not typically appreciate in value, although rare and colored diamonds may appreciate over time.

What Diamonds Have the Best Investment Potential?

Round Brilliant diamonds are considered the best type of diamonds for investment. Be sure to invest in the highest quality Round Brilliant diamonds that have 1-1.49 carats and flawless clarity.

What Are the Pros and Cons of Investing In a Diamond?

It can be tricky investing in diamonds.

Here’s a look at some of the pros and cons of investing in diamonds:

Pros/Cons of Investing in Diamonds

Diamonds can make an excellent investment if the buyer is patient, selects high-quality diamonds, and understands that diamonds are not a short-term investment.

The pros of investing in diamonds include:

  • Small and compact for easy storage
  • Long-lasting and durable
  • Longevity in the marketplace

However, investing in diamonds is never a guarantee.

Cons of investing in diamonds include:

  • Fluctuations in market value
  • Depreciation of up to 50%
  • Cumbersome sales process

Individuals considering investing in diamonds should be sure to evaluate all aspects of the investment opportunity.

Do Diamonds Lose Their Value Over Time?

Yes. Unless a buyer has invested in a rare or colored diamond, the diamond in question will likely lose its value over time.

Why? Because although diamonds are popular and in demand, the diamond industry is upheld by wholesale pricing and distribution. Because of this sales model, it can be incredibly challenging to resell a single diamond above the original purchase price.

How Much Value Does a Diamond Have After Purchase?

On average, a typical diamond will lose up to 50% of its value after purchase.

Can Diamonds Be Sold Easily?

Selling a diamond can be incredibly difficult and sometimes even stressful. A diamond on average will recoup only about 50-75% of its original sale value.

Unless a seller is a wholesale retailer, selling diamonds will often not be worth the effort.

Are Diamonds a Good Short-Term Investment?

No. The diamond market fluctuates often. Because of this, investors who are interested in short-term investments should not invest in diamonds.

What Can You Do With Old Diamonds?

Although old diamonds may not appreciate over time, they can still be utilized in other ways.

Some options for old diamonds include:

  • Rejuvenating the stone for a fresh look
  • Repurposing the stone into new items
  • Repairing and reselling the diamond

Final Thoughts: Are Diamonds a Good Investment?

Diamonds can be a great investment for individuals who understand how complex the investment process can be.

The truth is that although the market for diamonds will never go away, appreciation rates will remain slow while the resale process remains a challenge.

However, diamonds may be a great opportunity for those looking for a long-term investment opportunity – especially if the investment is for sentimental purposes rather than financial.

If considering investing in diamonds, be sure to consider the pros and cons of investing in diamonds to ensure the choice is right for you.

Eran Hayo is the Chief Editor of Jewels Advisor, with over 5 years of experience in the fields of jewelry and memorabilia. He built Jewels Advisor to serve one main purpose – to teach you everything he knows about jewelry, and help you make better-informed decisions when buying diamonds and engagement rings online. His work has been cited on famous publications such as The Sun, MSN and WikiHow.