Will you reap much from buying a diamond ring in 1, 5, or 15 years?
This is an important question to find answers to because of the general idea that expensive jewelry is an excellent investment for anyone.
But then, how valuable is a diamond engagement ring, and should you be investing in diamond jewelry?
Well, this article considers everything you need to know about investing in diamond jewelry and how much the jewelry will earn you after purchase.
Do diamonds lose value after purchase?
Essentially, diamonds lose value after purchase, but you will be happy to know that you will not lose everything should you choose to spend money on some of the finest diamond rings. Diamond jewelry generally loses some value, and when you choose to sell the diamond ring after some time, you will earn back between 25% and 50% of the original value of the diamonds.
The lowered value of the diamonds comes from the fact that the diamond pieces are often highly marked up, which is why the diamond lose much value. The other reason why a would diamond loses value is that diamonds aren’t as rare as they may have been marketed in the past.
Because of this, the purchase price of the diamond is not worth that much, which is why you may be better off investing in diamond jewelry pieces set in the finest 18k gold options because gold appreciates.
Since diamonds are not rare, the stone’s value doesn’t really appreciate unless you are talking about the rarest of diamonds. The good news is that keeping the diamond in perfect condition will hold much of its value.
Are diamonds worth anything after you buy them?
After purchase, the diamonds will lose some value, and in most instances, diamond jewelry will only be worth between 25% and 50% of its original purchase price.
That said, diamonds may have some resale value, but a lot more comes into play when determining the value of the diamonds. In most cases, the fundamentals of diamond trading will determine the value of the stones. This is important because, unlike gold, loose and diamond jewelry often maintain a stable market value.
However, the value of the stones is still contingent on other market forces that govern the gemstone’s availability and cost.
Often, the value of diamonds drops after the purchase of the stones because the jewelry sellers will mark up the prices of the stones, and so, you will never get the full amount of the diamonds after purchase.
That said, the certified diamonds are quite valuable, and you won’t have to worry about these gemstones being worth nothing after some months or years.
The certified diamonds are worth quite a bit because of the fact they come with the original documentation, which often includes the serial number of the diamonds, not to mention the pricing and ownership details that make the diamond rings stand out.
Why do diamonds lose value after purchase for a short time?
Generally, diamonds lose some value, just not 100% of their value. This happens almost immediately after buying the stones because the prices of diamonds are often naturally exaggerated, with sellers hoping to make much more than the diamonds are worth.
This is often the case because, despite the fact that diamonds are not really rare and are, in fact, in unlimited supply, diamonds are still considered rare and are very expensive thanks to the infamous marketing ad line.
A Diamond Is Forever, a marketing ad that not only put De Beers on the map as the biggest diamond company but also made everyone believe that the diamonds were, in fact, a necessary gemstone for every relationship.
This advertising campaign made the diamond the gold standard for everyone, so the demand for diamond engagement rings went up. And with De Beers’ control over the entire diamond industry for decades before the 2000s, they controlled the supply of the diamonds, meaning that they could keep the diamond prices high at all times.
This has been the case for years, and even though De Beers no longer controls the entire diamond industry, the diamond market is 100% controlled by different companies, which means that the diamond prices will always be high.
Artificial control over the market also means that the value of diamonds is seemingly high and unreachable, even though they may not be that valuable. Naturally, the value of the diamonds will dip immediately after the purchase of the gemstone/ jewelry.
Afterward, the diamond’s value will only be determined by the actual qualities of the stone, which are guided by the 4Cs of diamond quality – color, cut, clarity, and carat weight.
In the case of low-quality diamonds that may have been overpriced, the pieces will lose most of their value soon after the purchase, and only the highest quality diamonds will have a higher value than the diamonds.
As mentioned above, only the highest quality diamonds are valuable and retain most of their value for years after purchase.
There is also the fact that the value of diamonds is not standardized, as is the value of gold, which means that the diamonds’ value can be quite unstable and largely dependent on what the market control systems dictated.
Conclusion
At the end of the day, diamonds will lose their value, and in most cases, you will only get back 1/3 or a ¼ of the diamond ring’s retail price, especially if you didn’t overpay the diamonds in the first place.
So, with or without a huge markup on the diamonds, your diamond pieces won’t be worth as much as you may have hoped; which is to say that if you have been considering investing in diamonds, you may get a better deal from diamonds set in the finest quality gold or perhaps just stick with gold over diamonds – Even with the initial markup, gold retains value or appreciates over time thanks to the standard valuation of gold.
And only the finest, certified diamonds will retain some value.
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Stephanie is a jewelry lover when she was a teenager. Her major was fashion design when she was in college. She is a jewelry designer at SOQ Jewelry and other design companies. Now she is also a writer for our website. She writes a lot of designs&brands posts with very actionable tips.