I am sure you might be shocked, but the truth is that diamonds are not worth your dime. Miners say that it is faced with many challenges during its mining, which could be the source of it being worthless. Diamonds stones are known to decay and tarnish very fast, making them not worth your purchase. Business people term it as a depreciating asset. This contradicts the belief that gemstones appreciate and beat any threat of inflation. This article will give you various convincing reasons why diamonds are worthless and not a good investment. Let’s have a look at the truth about diamonds’ value.
Why are diamonds worthless?
Diamonds are a bad investment because they lack an intrinsic value
The main reason for investing in something is because you want it to give more returns in the future. Well, the case is different for diamonds. These stones lack intrinsic value, which means that their asset value will be determined by the cash flow it will generate in the future. A good example may be for better understanding is that of buying a house. If you buy a house and rent it, that house’s intrinsic value is the value you get from renting it.
Additionally, the intrinsic value is also the profit you get, maybe after selling your house later. In this case, the house will have served as a good investment because you got your original value and some benefits. This makes the house qualify to be called an investment.
On the contrary, if you buy a house and fail to make money out of it, then the house’s value will be equivalent to its resale value. This is because the car will be an asset that depreciates.
This is the truth about diamonds since their asset value depreciates. I know you are wondering how a piece of jewelry will depreciate with time. Unfortunately, the belief about gemstones appreciating is a lie. This piece of jewelry is never safe from inflation. However, the case is different for gold and silver. These two stones boast value appreciation. This is why they are the only stones trading in financial markets globally.
The diamond stone market isn’t liquid, and there is no benefit in buying a piece of diamond jewelry because it is not an investment. The moment you buy it, it loses its value, and this is why diamonds are worthless.
There is no durability in diamonds
Buying a diamond ring as a symbol of your undying love for your partner is not bad, but the truth is it won’t last forever. You must have felt busted with this truth about diamonds. Despite being the hardest stones, the truth about diamonds’ character is that they chip, get discolored, and look unappealing. It is helpful to know this truth before rushing to the gemstone dealer to buy diamonds. They might not last for months after purchase. Diamond conspiracy has dominated most people’s minds, but the truth is that it is not worth it.
Diamonds are lab-grown
There has been a great transition globally, with people preferring to buy lab-grown diamonds other than the mined ones. This is because the mined one has high costs of environmental and humanitarian. You might be asking what lab-grown diamonds are. These diamonds are similar to mined diamonds chemically, physically, and optically. The difference between the two is that mined diamonds are made under intense heat under the earth.
On the other hand, the lab-grown one is processed in a machine. If there were no alternatives to diamonds, then maybe the stones would have a high value. The availability of lab-grown diamonds has led to its worthlessness.
Diamonds have a 50% loss of value
You might be saving a fortune to own a piece of diamond. Well, there is nothing wrong with that. However, one truth about diamonds is that they lose their value by 50% as soon as you leave the jeweler’s shop. Many people make an uninformed purchase of this stone because they think it is the best way to show love.
You might also do so, thinking that the diamond ring will last forever to show your love. Sadly, that’s a lie and a marketing strategy introduced by de beers, which happens to be the biggest traders of diamonds.
The association of diamonds with love was a belief that diamonds last forever. This slogan was brought by one of the leading advertising agency that was contracted by de beers. They aimed to advertise their diamond when they faced a depressing time in selling their diamonds. They knew that something had to be done to boost their sales, and that’s when they painted diamonds with the color of love. This was in 1938, and since then, the whole world has believed this until now.
Eventually, de beer’s marketing strategy became a success, with many people coveting this piece of stone. Many American men feel that an engagement is never complete without a diamond ring. Besides, the diamond was also expensive for the benefit of de beers.
How rare is a diamond? This question unveils another reason why diamonds are worthless. Diamonds are not rare. This was also another strategy by the diamond trading companies to lure people into buying. No one wants something common, and therefore most people ended up buying diamonds. However, the truth is that diamond is readily available. What happens to prove the rarity of diamonds is that companies trading in diamonds propagate diamonds’ supply restrictions. This will translate to high demand and low diamond supply, making it a rare commodity. This is why you keep on wondering why diamonds are expensive.
Diamonds are not rare
As mentioned earlier, diamonds are not rare. On the contrary, the Gem Society has ranked diamonds as the most common mined stones. So saying that diamond is rare is more of a belief than reality. Diamond marketers have made people believe that the stones are hard to find for their own benefit. However, the high supply of diamonds doesn’t increase its value. The stones are nothing compared to other stones.
Diamonds can bring injuries
Another reason why diamonds are worthless is that they can bring injuries. These pieces of stones are mined in very harsh conditions exposing the miners to danger. You can’t compare the value they bring to human lives. The stones are worthless right from their source because they bring more bad than good.
Diamonds have been marked up
Even though the diamonds are available in big supply, their prices are exaggerated. However, one can’t ignore the fact their production is much involving, which could be one reason for their high prices. Diamond dealers have marked up these stones to make too much profit while the buyers get a false product. These diamond traders are what drives the prices of diamonds.
In many parts of the world, these marks range between 100 and 200 percent. Generally, the diamond buyers remain the losers because they pay too much for a valueless piece of stone. De beers company maintained a monopoly over diamonds’ production and sales, ensuring that they dictated their price. This is because they had the power to cut off the supply and remain dominant in the market.
There is no financial commitment in diamonds
Early in the 1930s, de beers pulled another trick to ensure their sales keep on going up. Their strategy was to ride on the Breach of promise act, which was a short-lived law. This law favored women who were engaged or married. As a woman, the law allowed you to sue any man who would leave you at the altar. The other side of the law made men believe that diamond rings were the perfect proof of their financial commitment. However, that law doesn’t exist today, and therefore diamonds make no sense even in weddings and engagements.
The availability of diamonds remain up
Diamonds will always be available, and that means that their value will be zero. Anything easily available doesn’t have any worth, and that is basically the definition of a diamond. The availability makes the stones affordable for both the elite and the poor. The truth about diamonds’ value is that they are too much available to rise in worth.
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Conclusion
These are interesting facts about diamonds, and not most people know them. People have been manipulated to believe that diamonds are precious and worth stones for a very long time. That has been a lie made true by advertising agents strategically focused on tying people down. The truth about a diamond is that it decays, tarnishes, and cracks. There is no need for you to invest in something that will not serve you for long, neither bring benefits. I am sure this article has been mind-blowing. Besides, you have all the reasons why diamonds are worthless. It would be wise to consider silver and gold, especially if you are looking at a worthy investment.