Diamonds Are a Fools Best Friend
With it being June and all the exchanges of shiny rocks and gold bands in the happy gathering of marriage and what not, it would be a disservice if I didn't do my typical cynical rant about how diamonds are pretty much the worst investment you could probably make.
The whole six months salary or whatever trope cliche on how much a man should spend on a pressurized charcoal rock in the tradition of asking for the gal's hand in marriage always seemed odd to me. Wouldn't it be a wiser choice to instead of dropping such coinage on that blood soaked diamond, you instead you could easily put that money into actual assets and proper investments that will have a far better rate of return than something that loses 50% of the value the moment you walk out that jeweler's doors.
You have to remember that diamonds aren't even that rare. It's all a marketing scam brought about by DeBeers. Diamonds aren't rare at all aside from the carefully restricting of the supply by those fuckers that has kept diamonds at the retail level so high. But hey, try reselling a diamond to a dealer and they'll laugh at you.
Doesn't that make you think?
And yet here we are with this societal obligation to furnish a diamond engagement ring. An obligation that is around because the company who controls it stands to make a lot of profit of such forced upon tradition.
The whole intrinsic value of a ring is just crazy to even think about. Let's face the reality that a diamon is a depreciating asset masquerading as an investment. It's like comic books and video game systems. People assume you can make your money back on those things, and in some case even more. But the reality is that it's constantly losing value.
Gold and silver are commodities that can be invested in on the open market. They can appreciate and will hold their values at times of inflation. You've seen the many gold into cash ads. People pay money for that shit and in tough times it's often a smart choice to cash in your gold when it's at the high. Becuase you need to remember that it can very well fluctuate down as well.
I still wouldn't suggest it as a great investment since the mark up for gold jewelry is between 100-400% and, well, that shit is more flash and a smarter choice would be to put it into your 401k or IRA.
But when you get into Diamonds, that shit is not an investment and it should never be viewed as one. The main reason why is because you flat out can't resell it. Retail jewelers, especially the prestigious 5th Avenue stores, prefer not to buy back diamonds from customers, because the offer they would make would most likely be considered incredibly low.
Most jewelers would also not like to offer a customer a super low price of actual whole sale because then it does tarnish the image of a diamond as an investment. As well as most jewelers get their stones on consignment and don't need to pay for them until they are sold. So why would they risk their own cash to buy back a diamond from a customer?
So now that we covered how diamonds aren't an investment and are all flash and you want one because it's pretty. Let's move on to the next part where we talk about why you think about diamonds in the way that you do. The Marketing of it.
Up till the mid 20th century, diamond engagement rings were a small niche industry in America. The American market for diamond rings. So De Beers went to Madison Ave to the folks like Don Draper to inject new life to their product and get you to buy into this idea. And boy how they were successful.
They got Gerold Lauck and the N. W. Ayer advertising agency on the case with the approach that they needed to target young men and instil this notion that diamonds were the gift of love. The bigger the rock, the bigger the devotion.
Then they went for the sweet spot. Lauck's next approach in defense to those hold-out women who wanted to be different was to shoot for the man's self worth. They promoted the diamond as one material object which can reflect, in a very personal way, a man's success in life.
Got a small rock? Well then, you must be with a loser. The very concept of a diamond ring symbolizing marriage began with a bunch of rich white men in the 40's tricking you into thinking you needed this piece of rock. And today over 80% of women in the US receive diamond rings when they get engaged.
But back now to the rarity, or lack there of in a diamond. Back in the 1870's, diamonds were very rare. They only showed up on crowns and royal necklaces. But in 1870 a giant deposit of diamonds was discovered in Kimberley, South Africa. As diamonds flooded the market, the financiers of the mines realized they were making their own investments worthless due to market saturation. The more they mined, the more diamonds became less rare and would lose their value.
You wouldn't think diamonds were worth anything if that trend continued. It took an enterprising fella by the name of Cecil Rhodes buying up the mines to control the output and keep the price of diamonds high. Soon he controlled all the supply in South Africa. It's because of them that you perceive the value of diamonds as to be something worthy of investment. In reality it's a false sense of investment and you and your future significant other are better off using that money to actually invest into your future or have one hell of a better wedding.
The ADD Blog at Comic Book Galaxy
17 hours ago