Author Topic: Does anyone else think of a diamond purchase as an investment?  (Read 1374 times)

Offline djm195

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I would like to open this to discussion.

Do you look at your collection and or diamond purchase as an investment or a frivolous purchase? Have you ever regretted buying a diamond, if so why? Does the fact that DBL offers a trade up policy make it easier to purchase a diamond without regret or does the policy have no affect on your decision to pull the trigger?  How does trust in your jeweler play into this decision making?

Just wondering...

Offline ElaineDBL

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #1 on: March 26, 2013, 07:49:30 AM »
I guess most of my items would classify as "frivolous" in a way, but they are bought for my enjoyment and most have a somewhat emotional attachment.  There are some that don't that kind of serve a more practical purpose of sorts - like simple earrings - something to wear when out and about to fill the hole (literally).

Knowing that I could trade things in or having a jeweler with a great refund policy does come into play for me.  I am also more likely to buy a diamond and set it knowing that if I tire of the setting, it isn't hard to change it out or trade in.  If I didn't trust a jeweler there is very little chance that I would buy things knowing I could change what I want to do with it at a later date.

With jewelers that don't offer such good refund or trade in policies I am less likely to buy unless it is a replacement for a piece I wear often.

I do not try to live with regrets though.  Sometimes with jewelry I get tired of a piece and knowing I can trade it in instead of having to resell it myself really is a good feeling.  

That said I am rather indecisive and I usually do not purchase unless I am pretty darn sure of myself.  I think I buy less things because of that - I'm almost never sure of myself at first and do a bang up job of talking myself out of pieces only to feel sad that I didn't jump on it quicker.  

I must say I haven't worried at all about a piece from DBL though for this reason - I trust David will try his best to make me happy.
« Last Edit: March 26, 2013, 02:16:27 PM by clgwli »
Squiggly

Offline Trinkette

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #2 on: March 26, 2013, 08:59:51 AM »
This is a great topic, DJM. I WILL respond after organizing my thoughts (I know, I know, a near impossible task  ::) ). Must get some work done first...

Offline lovecolor

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #3 on: March 26, 2013, 09:15:05 AM »
I do think of some of my jewelry as an investment...in terms of not losing value like shoes or handbags...to me, it's a smarter way to spend my money.  I also like to think that I'll be passing these favorite pieces of mine down to my family.  Although, I do sometimes feel I'm being frivolous with the "volume" of high end jewelry that I have collected over the years...do I really need 10 pairs of earrings, 10 rings, 10 necklaces? ::)  

(yes I do!)

Anyhow, being able to trade-up with DBL pieces definitely is important to me!  I do get tired of some jewelry pieces...so being able to trade-up helps tremendously...especially since I still haven't learned how to wait patiently till I can afford the actual style that I want.  

There were two times that I regretted buying diamonds...once when the clarity and color were too "low" for my "white" diamond need/taste...I am very sensitive to the "yellow" in diamonds graded G and lower...then I bought little diamonds for earrings and I overkilled on the quality and color...I didn't need to go D and "IF" for earrings...or did I???    >:D              
« Last Edit: March 26, 2013, 09:16:06 AM by lovecolor »

Offline Rexelle

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #4 on: March 26, 2013, 01:48:23 PM »
I try not to think of my sparklie purchases as financial investments, per say, mostly because I know that I would never want to think of selling them (excluding a trade up with D). They are SO much more than a way to sock money away for a rainy day, ... which is how I think of my other investments!

From pre-DBL experience, I also know that I would also most likely never recoup the initial expense if I were trying to sell a piece............let's not go there!

Having said that, I LOVE the security of making a DBL purchase, since I know that I can trade up, and so not loose a PENNY of the money I have laid out,......and I view my DBL pieces as 'special', and they all have a big sentimental 'investment' now for me, from my first 'treat-myself-post-divorce' FLY radiant earings, my 'initials' in white and yellow that hubby had D make for our first anniversary, all the way up to "Curvy Pear" my now upgraded-E ring, my baby ring "Olympia" and now "Prometheus"..........

Thinking about it, I have yet to buy a DBY piece that I would want to trade back to D at this point..........some of my old pre-DBL pieces, sure, they could wing their way to NYC in trade if I ever thought it through, but I'm kinda stuck on, and very happy with my daily pieces, and I only open the safe to pull out special pieces or to change things up for big events these days, so I rarely think about what I have in there. Sad really that i don't play with  my sparklies more often....... :-[

I'm not going to go into the "how many necklaces do I need?" debate, because it is obvioulsy WAY more than I already have!!! ;D
And the same goes for earrings, and bracelets. Rings,..........I think I need one more. Perhaps two, or three,.....I'll work on that soon,... >:D

M

Offline oldmancoyote

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #5 on: March 26, 2013, 04:05:55 PM »
You shouldn't have asked this question... now I feel I have permission to unleash a novel-length post on the whole forum.  >:D

Before I even start, let me point out that DBL is a bit of a different proposition here, but I'm talking in general about "buying, holding and selling diamonds and jewellery ("diamonds" for brevity) as an investment".

1. Diamonds are illiquid. Unless one is in the trade (and even then...), it is difficult to sell diamonds quickly, at a time under the total control of the seller, and at a transparent, "market" price, unlike stocks or funds. Of course a deeply discounted price will sell quickly, but that's hardly a good investment, usually.

2. Diamonds are subject to the vagaries of fashion. 30 to 40 years ago, marquises were all the rage. Now they are slow movers, and this is reflected in the prices. Predicting fashion over the long term is rather difficult, and while some things are safer bets (e.g. pre-1918 Fabergé pieces), their purchase prices tend to reflect that safety.

3. Diamonds are not highly commoditised, and as we know small differences can have a large impact on price. Judging those small nuances is not a task for the inexperienced or faint-hearted, and it can make the difference between a good profit or a large loss. Even more so with jewellery, btw, where fakes abound and a signature can mean a factor of 10 on the price.

4. Diamonds are exposed to very large transaction costs. Partly because of all of the above, a "private", consumer-to-consumer (or consumer-to-business) sale is generally characterised by what seem to be large "margins" due to the way in which the diamonds industry is financed and run.

It's not uncommon for a consumer trying to liquidate a piece of jewellery to be offered 1/3 or even 1/4 of the retail price - particularly if the "retail" price has been paid in a high street store. Whether these transaction costs are justifiable or a rip-off is a subject for another discussion, but the fact is that they are there.

on the other hand,

5. Diamonds don't depreciate with use. Once taken the "hit" referred to in point 4 above, there is little ongoing loss with use - unlike (e.g.) cars. Nor are there high ongoing maintenance costs, unlike houses, some types of financial investments and - again - cars.

6. Diamonds also don't produce an income, but the "enjoyment dividend" can be very high, not unlike the aesthetic appreciation for fine arts or a nice vacation - which are perfectly valid reasons for purchasing a piece of art or going on vacation. Man does not live of bread alone - though as king Midas is fond of reminding us, gold is not a nutritious diet.

7. Diamonds have - as a minimum, and on a retail-to-retail price basis - kept up with inflation, at least over the last 30 years, post diamond bubble of the early 1980s. So have precious metals (speculative spikes excepted). Not a lot of other luxury goods can claim that, and the scrap value is the lower bound on the value of a piece of jewellery.

8. Some types of diamonds and jewellery have performed substantially better than other asset classes (e.g. signed Art Deco or Modernist jewellery; large natural fancy colour diamonds) - but they are still significantly riskier than traditional investments because of all the factors above. And some other types of jewellery have done much worse - "Victorian" jewellery was highly fashionable in the late 1970s; now it's barely worth its scrap value unless it's signed and exceptional (e.g. Falize, Lalique, Fabergé, Giuliano, Castellani, ...)

9. Second-hand, pre-owned, pre-loved, estate or whatever else you want to call it, has a special financial status, in as much as often the price is not reflective of the amount of work and skill (and sometimes luck - many jewels have been created around a special stone or parcel) required to produce a similar object today.

With these premises, I cannot say that an "investment" in diamonds is a wise thing financially - or at the very least there are plenty of as-good or better options. As a store of value, it's not too bad, as long as one buys well to start with. A "full high street price purchase" is almost unavoidably a bad one - financially.

This said, having "invested" (or whatever else it is) the equivalent of several points of US GDP years of salary in a collection of over 100 pieces, I have to admit that I am looking at it at least partly as an investment. As such, I can see that my portfolio has some stars, a few "average" performers and a fair number of dogs or at least of very questionable pieces, financially speaking (evaluation based on current market conditions, and main auction results). Does this deter me from buying more jewellery? No - in fact I just bought another 4 pieces, and am considering a 5th one. One of the five is a future star, another two have potential for appreciation because I bought well, and the last two are - if I'm lucky - average value holders.

The final general observation is that - as in anything that can be considered "artistic" (be it paintings, furniture or jewel) - good or exceptional quality in materials, manufacture and design will stand the test of time better in all respects, value included.
« Last Edit: March 26, 2013, 04:26:24 PM by oldmancoyote »

Offline Trinkette

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #6 on: March 26, 2013, 04:20:34 PM »
 :notworthy:

Offline djm195

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #7 on: March 26, 2013, 06:20:24 PM »
OMC, I was waiting for your response...I knew it would be good.

I don't have time to comment right now, but allow me say this in parting: ....this coming from the man who has the most exquisite collection of jewelry I have ever seen....I applaud you on your transparency. Thank you for taking the time to write such a well thought out and heartfelt post.

Like you, I look at the "important pieces" as art....some may turn out to be dogs over time and one never knows how the fashion market influences trends in jewelry and therefore demand. That said, you have to admit....there is a "chance" some of your pieces in your collection will appreciate in value and be highly desirable based on your eye for fine jewelry.

The point I am trying to make is this....there are pieces you designed from DBL over the years I KNOW will bring you more than what you paid to have them built. They are one of a kind pieces that are so perfectly designed and executed, you would be hard pressed to find anything comparable on the market. Granted, not every piece falls in this category...but  I can list more than a handful of pieces in your collection that fall in this category. For those that have not seen OMCs collection just search the coyote den and see for yourself. It is one of the most popular threads on this forum.  

Anywho...I WILL write more once I hear from more members.
« Last Edit: March 26, 2013, 06:21:08 PM by djm195 »

Offline Sanchica27

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #8 on: April 01, 2013, 08:02:58 PM »
I think of them as heirlooms, not investments.  I would only consider something an investment if I bought if for less than I knew I could sell it for and actually planned on doing so.

I also do regret several jewelry purchases made when I was younger at crappy places with no trade up or a trade up that wasn't worth anything as the inventory was very limited.  I have just sold the last of those pieces.  At a loss :O(

At this point I consider myself much more educated and experienced at buying jewelry.  Only stick with well established vendors with proper trade up policies :)
« Last Edit: April 01, 2013, 08:03:40 PM by Sanchica27 »
always saving up for my next piece!

Offline dovesgate

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #9 on: April 02, 2013, 12:09:30 AM »
Now that I've done some research on diamond jewelry - no, I don't really think of my diamond purchases as an investment in anything other than my enjoyment. Some of my jewelry would go for about the same as I've spent, some less, and possibly only my solitaire for more.

I have thought of them as heirlooms, like Sanchica. I like the idea of my daughters picking something special to me to be special to them after I am gone (or too blind to see any sparkle!). I like the idea of them being investment pieces but honestly, if we're looking at selling my jewelry quickly, we'd be taking a loss no matter where I purchased it or how good a price I got for it. Stock is much easier to unload.

I haven't really regretted any of my purchases but I have wavered over selling a piece or two.

Offline saqsay1

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Re: Does anyone else think of a diamond purchase as an investment?
« Reply #10 on: April 06, 2013, 09:38:48 AM »
I look at it this way. Men buy fast cars or big trucks for 30-40,000+. after I0 or I5 yrs, the car or truck has lost most if not almost all it's value. Diamonds are forever if not lost or stolen, and will always hold most if not all their value. This is what I told myself when I financed the Mach II 3 yrs ago. I just finished paying it off. Now the uestion is, should I get a new car? or a new diamond?  ;D

So does the above mean it is an investment? or a selfish purchase?  :dontknow:

maybe the best answer would be both, because if push comes to shove, I would sell it, if I had to, but it would break my heart to do so.
« Last Edit: April 06, 2013, 09:41:18 AM by saqsay1 »
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