Does A Diamond Ring Hold Its Value?
Many people prefer to invest in a diamond ring when buying engagement rings. That is because they think that the value of a diamond ring will appreciate with time. On the other hand, a diamond ring is considered a status symbol as it is the favorite precious stone of a majority of celebrities out there. Does a diamond ring really hold its value? Read on to find out whether a diamond ring really holds its value over time.
Like most of the other goods and services, the value of a diamond is driven by the forces of supply and demand. But diamonds don’t have a single source that defined their value similar to gold. In fact, diamond prices can vary depending on whom you ask. Although the Rapaport Pricing Sheet is used as a benchmark in pricing diamonds, it doesn’t show the actual value of a diamond. It acts as a guideline which shows the range of prices that diamond traders would accept. The value of the precious stone is set by the individual who makes the offer. Hence, you should make it a point to approach as many buyers as you can when buying a diamond ring.
One important thing to consider is that you won’t get the same value that you purchased the diamond ring when you resell it. A significant drop can be expected under normal conditions. In fact, the drop can be as low as 20%-30% of the original retail price. There are many reasons for this predicament. One reason is the overheads incurred in getting the diamond from the mine to the jewelry shop. There are polishing and marketing costs that are added on top of this. Another important reason is the high-profit margin set up by the jeweler and everyone involved in the process. When all this is added, the value of a diamond ring is way above its actual market value. That is why a diamond ring won’t hold its value over time similar to gold jewelry. But diamond is considered a status symbol because the precious metal is rare and a majority of celebrities wear it these days.
But diamonds with unique qualities and a history such as those that belong to royalty increase in value over time. But this is not the case with most of the diamonds on the market. Diamonds are usually quite different from each other. You won’t be able to find two diamonds that are almost the same. Hence, pricing a pre-owned diamond becomes even more difficult since there are no real standards to go by. That is why you should be aware of these factors when investing your hard earned money in a diamond engagement ring.
The rarer the diamond is, the higher it is going to be priced. Diamonds are usually priced per Carat. They are usually priced around $100 to $300 per Carat. But this may depend on the quality of the stone. If the quality of the stone is low, it will be priced based on the gold weight of the engagement ring. If the stone is of very low quality, it may be ignored when pricing the engagement ring. You should be very cautious when investing in a diamond ring due to these reasons.
Many people invest in diamond engagement rings thinking that the value will appreciate over time. Diamond is a status symbol due to the rarity of the stone. The stone is priced based on its rarity. The most important thing to remember is that diamonds don’t hold or increase its value over time.
