Last Updated: April 2026
TL;DR:
- Diamonds lose 50%+ of their retail value the moment you leave the store. They are not investments — they are consumption goods with a marketing story attached.
- The core premise (diamonds are rare and forever) was invented by an advertising agency hired by De Beers in 1938 and has been the operating mythology of the industry ever since.
- Lab-grown diamonds are chemically and physically identical to mined diamonds and cost 60-80% less. The price gap has widened significantly as lab-grown technology has scaled.
The phrase diamonds are forever was written by Frances Gerety, a copywriter at N.W. Ayer and Son advertising agency, in 1947 for a De Beers campaign. It became the most recognized advertising slogan of the 20th century. It was also one of the most effective corporate influence campaigns ever run — convincing an entire civilization that a specific product was both rare and permanent, when it was neither. Here are the 10 substantive reasons behind that conclusion.
Why Are Diamonds Worthless? 10 Reasons
1. Diamonds Lose 50%+ of Their Value Immediately
The moment you buy a diamond from a retailer and walk out the door, the stone has lost a minimum of 50% of what you paid. The retail markup on diamonds is not a trade secret — it is how the industry is structured. Retailers buy from wholesalers who buy from distributors who buy from miners, and each layer adds margin. When you attempt to resell, you can only access the wholesale market — which means you receive a fraction of what retail charged you.
The 1938 De Beers campaign run by N.W. Ayer fundamentally reshaped engagement culture. Before that campaign, diamond engagement rings were not standard practice. The campaign manufactured both the norm (you must propose with a diamond) and the value framework (bigger diamonds signal deeper love). This was marketing in service of corporate profit, not cultural tradition.
2. Diamonds Have No Intrinsic Value
Intrinsic value describes an asset that generates future cash flows — a rental property, a dividend-paying stock, a productive business. Diamonds generate no cash flows. They are a depreciating asset in terms of resale, with no functional utility in consumer form. The former chairman of De Beers has himself acknowledged that diamonds have no intrinsic value. Gold and silver hold value over time and trade on global commodity markets. Diamonds do not — the market is illiquid, non-standardized, and controlled by a small number of industry participants.
3. Diamonds Are Not Rare
Diamonds are the most abundant gemstone mined on earth. The International Gem Society classifies them as the least rare of all precious gemstones. The perception of scarcity is entirely manufactured: De Beers historically controlled the global diamond supply chain and released stones to market in carefully calculated quantities — just enough to meet demand, never enough to let the price fall. Supply restriction, not geological scarcity, is what made diamonds expensive.
4. Retail Prices Are Marked Up 100-300%
The markup applied to diamond jewelry at retail is not modest. The Atlantic reported documented retail markups of 100-200% over wholesale prices. Tiffany and Co. was cited at markups of 253-336% in some analyses. Part of this is legitimate — retail overhead, design, setting craftsmanship, and branding all add real cost. But the magnitude of the markup illustrates that a significant portion of what you pay for a diamond is brand and channel margin, not stone value.
5. Diamonds Are Not Forever
Diamonds are the hardest naturally occurring substance on earth (Mohs 10), but hardness is not the same as permanence. Diamonds chip, crack, discolor, and in some cases shatter under the right impact. They also undergo a very slow natural transformation — diamond is a metastable form of carbon that eventually converts to graphite under thermodynamic equilibrium. This occurs over geological timescales, but the chemical reality directly contradicts the advertising claim. A diamond is forever is a tagline, not a material property.
6. The Proposal Diamond Was a Legal and Marketing Construct
In the 1930s, several US states had Breach of Promise laws that allowed women to sue men who backed out of an engagement. De Beers recognized that a diamond ring could serve as a form of financial collateral under this legal framework — if a man gave a diamond ring, walking away from the engagement would result in legal liability for the ring’s value. The industry capitalized on this to establish the diamond engagement ring as a symbol of financial commitment. The Breach of Promise laws have since been abolished in most jurisdictions, but the marketing norm they helped establish remains.
7. De Beers Monopoly Controlled Global Prices
For most of the 20th century, De Beers controlled an estimated 80-90% of global rough diamond production and sales through the Central Selling Organisation. This monopoly power allowed them to set global prices by controlling supply. Antitrust challenges in the US, EU, and elsewhere have reduced this dominance significantly since 2000, but the pricing structures and cultural norms established during the monopoly era persist. The price of diamonds today reflects a supply-managed market history, not free-market valuation.
8. Lab-Grown Diamonds Are Identical and Cost 60-80% Less
Lab-grown diamonds are not simulants like cubic zirconia — they are chemically, physically, and optically identical to mined diamonds. The same carbon crystal structure, the same hardness, the same light behavior. A gemological laboratory cannot distinguish a lab-grown diamond from a mined one without specialized equipment. As of 2026, lab-grown diamonds cost 60-80% less than equivalent mined stones. If the diamond market priced purely on material properties, lab-grown and mined prices would converge. The gap persists only because of perceived status attached to the mining origin story.
9. Supply Will Never Run Out
The scarcity argument for diamonds assumes that the supply is genuinely finite and diminishing. In practice, new diamond deposits continue to be discovered, lab-grown production scales cheaply, and the above-ground stock of diamonds continues to accumulate. The diamond that leaves a consumer’s hands through resale, estate sales, or discard re-enters the secondary market. There is no mechanism by which the total global supply of diamonds decreases. A genuinely finite resource commands real scarcity premiums; diamonds do not qualify.
10. No Verifiable Future Value as an Investment
For any asset to function as an investment, it must either generate income or appreciate predictably in value against a benchmark. Diamonds do neither reliably. The secondary market for diamond jewelry is characterized by significant information asymmetry (you rarely know what you are actually getting), illiquidity (finding a buyer at a fair price is difficult), and price opacity (no public exchange or transparent pricing mechanism). Unlike gold, which trades on commodity markets at a published spot price, a diamond’s resale value is whatever a specific buyer will pay on a specific day — which is consistently much less than retail.
Does This Mean You Should Not Buy a Diamond?
Not necessarily. Jewelry is consumption, not investment, and consumption has legitimate value. If a diamond ring symbolizes something meaningful to you and your partner, that symbolic value is real even if the financial return is not. The issue is the persistent marketing claim that diamonds are an investment or a store of value — they are not, and buying them with that expectation leads to financial disappointment. Buy a diamond because you want one, not because you believe it holds financial value over time.
Frequently Asked Questions
Are diamonds a good investment?
No. Diamonds depreciate immediately upon purchase, have no liquid secondary market, and generate no income. Gold, silver, and real estate are the conventional stores of value in personal finance. Diamonds are consumer goods with high emotional marketing and high markups — buying one is a valid consumer decision, but not an investment decision.
Are lab-grown diamonds worth buying?
Lab-grown diamonds are chemically identical to mined diamonds and cost significantly less. If you want a diamond for its physical properties (hardness, light behavior, appearance), a lab-grown stone delivers all of those at 60-80% of the mined stone price. The only thing missing is the provenance story — which carries value only if that narrative matters to you personally.
Do diamonds hold their value over time?
No — not as consumer goods purchased at retail. Exceptional investment-grade diamonds (rare colors, significant carat weights, notable provenance) have shown appreciation at auction, but these represent a tiny fraction of all diamonds sold. Standard engagement ring diamonds bought at retail reliably lose 50%+ of their purchase price upon resale. They are jewelry, not assets.
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.