Why are diamonds the perfect investment?

If you want to buy diamonds as an investment, you will naturally want to know how profitable this is going to be in the long-term. Diamonds are a good investment for several reasons. Not only are they considered as secure or crisis-resistant investments, but they are a finite resource meaning diamond prices should increase with time on the global market. As any other investment, a diamond investment should usually be approached from a rational standpoint. With increasing popularity as an investment option, diamonds have proven to be a safe investment with a variety of benefits. However, unlike any other investment, a diamond can also create an exceptional, emotional value. This emotional aspect cannot be underestimated and is in many cases priceless. In order to illustrate this we will explain why it is important to understand consumer habits, how this emotional value emerges and what the key emotional impulses are to look out for when helping customers.

Why it is important to understand the buyer’s impulses?

Emotions act as one of the main motivating factors behind much of contemporary consumption, and in most cases, is more important than actual need when buying. Why a particular luxury item, such as a diamond bracelet or ring, is purchased, is a combination of psychological, cultural and economic factors.

For diamond retailers, sales are more rewarding when a seller understands the interplay of the buyer motivation and emotion. Desires could be to spark romance in a couple, a reward for an achievement such as graduation or career progress, or even boost an individual’s happiness after a particularly difficult time. Consumers naturally attach emotions to luxury purchases, therefore it is important to fully understand what these are, in order to accompany the customer in finding the best possible purchase for their needs. As a result, diamonds and the diamond industry are entirely reliant on the whims of fashion.

What gives diamonds this exceptional emotional value?

There are many different ways to invest in luxury goods you can physically enjoy, such as cars, handbags, property and art amongst others. Diamonds, however, distinguish themselves even more as they are wearable, and people often relate a purchase to their emotions or to celebrate an important occasion. Diamonds not only mark a moment in time, they travel with us through all the other days adding brilliance and sentiment throughout a lifetime. A diamond’s emotional value continues to grow and is therefore often a considerable reason for investing in diamonds.

What are the main emotional motivations behind diamond purchases?

The ultimate symbol of love. “A diamond is forever”, or so the world was told in 1947. The slogan, formulated by the world’s largest diamond producer, De Beers, is one of the most successful advertising campaigns in history. Being incredibly successful, it resulted in the diamond developing into the ultimate symbol of love. The saying ‘A diamond is forever’ is the idea behind the true alliance of the engagement ring and the diamond. Ever since, it seems unthinkable to purchase an engagement ring without a diamond. Many engagement diamonds also become family heirlooms transcending love for many generations to come.

A symbol of longevity. The qualities that make diamonds so valuable in the industrial sector – qualities such as longevity, durability, and clarity – are transferred into a symbolic way to diamond jewellery. The value of longevity, or a diamond’s endurance under tremendous stress, may influence a purchaser’s decision. For example, the jewellery piece chosen by someone to symbolise their relationship is often an expression of everlasting love and ability to withstand the challenging times.

Rejoicing. Life has many celebrations: engagements, anniversaries, children, and when there is a special event, it is important to capture the moment. In many cases, people give diamonds to mark the celebration. This is particularly true for wedding anniversaries, where some of the traditional names represent the appropriate gift for every year (think of the Diamond Jubilee).

The desire for something truly remarkable. Diamonds are not only rare, their 4C’s add to their quality and turns them into something truly special. A beautiful stone serves as a symbol of all virtues of the person receiving it. Diamonds can be seen as a true representation of their grace and natural beauty.

Reflection of qualities. People often buy a diamond of a particular shape and colour to express a specific personality. Qualities such as inner strength, passion, reliability, or dependability, are often marked by a matching precious stone. For instance, a yellow diamond represents wisdom and creativity, whilst an emerald cut embodies strength and confidence.

Self-worth. It is common for someone to measure their self-worth by items they possess. Quality, value, price, and size of a diamond contribute to the reflection and shaping of a buyer’s identity. Some research shows that consumption of certain products can also restore feelings of self-worth that have been damaged.

Achievements. Reaching a particular goal in life allows for congratulations, frequently celebrated with the purchase of a wonderful gem. For example, a diamond could represent the struggles withstood to reach an objective, without breaking or shattering and radiating throughout.  

Why are diamonds the perfect investment?

In general, investing in diamonds offers a large variety of benefits. They are likely to increase in value, and value augmentation is caused by significant increase in demand and decrease in supply. Additionally, they are a safe investment that offer advantages such as high liquidity, tax benefits and endless intrinsic substance value. More importantly, they contain a priceless emotional value, and no other financial investment offers this unique combination of benefits.

Would you like assistance with a diamond valuation or are you looking for advice on how best to invest in diamonds? Please contact our team.

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