Are Natural Diamonds a Good Investment?
Diamonds have long been associated with status, value and rarity. While many associate the stones with love and engagements, others wear them to advertise their success. Once exclusively extracted from the earth, diamond gemstones can now be created in laboratory environments. But are natural diamonds a better investment than lab-grown alternatives? Here’s how the value of each type of diamond changes over time.
Are Natural Diamonds a Good Choice?
For centuries, diamonds have been a status symbol, which demonstrates the wearer’s wealth and importance. With that said, actual diamond values have fluctuated through the years in relation to numerous market variants.
As with any other commodity or product, diamond values shift based on supply and demand. Just like the values of platinum, silver and gold, the market for diamonds will rise and fall based on the overall demand for the gemstones. When brand-new diamond mines are found, supplies go up, and diamond prices naturally diminish.
So, with all this in mind, are natural diamonds a good investment, and will their value appreciate over time? The answer is almost always yes, but with some caveats. The value of most natural diamonds will either increase or remain consistent over time because there is essentially a finite supply of the stones within the earth. So, if you buy a natural diamond at a fair price and keep it in good condition, it will generally increase in value over time. How much depends on a few important factors, including supply and demand.
What About Lab-Grown Diamonds?
Mined diamonds take billions of years to form under intense heat and pressure deep within the earth. Lab-grown diamonds, on the other hand, are created in a relatively short amount of time using specialized equipment. Despite these differences, both types of gemstones are identical down to the smallest molecule. The only real difference is that lab diamonds have microscopic inscriptions identifying them as such.
While they are identical to natural diamonds in every way, lab-grown diamonds don’t have the same limited supply, and this can ultimately affect their price tag and value. With that said, this doesn’t mean a lab-grown diamond will lose any of its value over time.
As with almost every valuable item, both natural and lab-grown diamonds will increase in value along with inflation. A diamond gemstone purchased in 1990 would be worth a lot more today. Whether this is owed to the rarity of the diamond or inflation itself, however, will depend on a number of different factors, including the uniqueness of the diamond, its color and quality, the current popularity of its shape and so on.
From an investment point of view, lab diamonds will not lose value over time; however, unlike natural diamonds, they don’t typically gain value outside of inflationary dollars. So, essentially, these gemstones won't become any less valuable but also aren't going to bring much, if any, ROI. Natural diamonds, on the other hand, can increase in value based on fluctuating market demand and relative scarcity which can shift over time.
Are Natural Diamonds a Good Choice?
Lab-grown diamonds bring a number of benefits that make them preferable to many people. In addition to having a lower price tag, these gemstones are generally considered to be more ecologically friendly compared to natural diamonds. Still, many people prefer natural diamonds for a number of compelling reasons.
While lab diamonds have the same properties, they lack the same history and “romance” as mined diamonds, which have been in existence for millions of years. Due to their limited supply, natural diamonds are also veritable collector’s items. This promotes greater value while also adding to their mystique. Still, when it comes to choosing between a natural or lab-grown diamond, it all comes down to personal preferences.
Making a Wise Investment
What makes a natural or lab-grown diamond an investment-grade gemstone? In almost every instance, it’s the color, clarity, cut and carat weight. The higher a stone ranks in these critical categories, the greater its value now and in the future.
When designing his artfully crafted engagement rings, John Atencio uses only the highest-quality diamonds. When added to his wearable works of art, these creatively conceived jewelry designs hold considerable value in terms of dollars and emotional meaning. It all starts with a uniquely conceived, hand-drawn design and ends with a beautifully balanced engagement ring that sets the gemstone and ring in a harmonious union that’s as beautiful as your one-of-a-kind love story.
While deciding on the right engagement ring, diamond or diamond jewelry piece can feel confusing, your experience never has to feel that way. At John Atencio, our considerate experts can show you how to choose the perfect stone cut and carat, along with the ideal setting and precious metal, based on your unique preferences. Shop online or make an appointment at one of our many convenient locations where our consultants can guide you toward a stunning jewelry selection.