Diamonds have been a girl’s best friend for many decades – ever since Marilyn Monroe first sang the song in the film Gentlemen Prefer Blondes. But diamonds have certainly not been the domain of just women – the history of jewelry for menand women goes back centuries as a way of both preserving and demonstrating wealth and power.
The rise and rise of the diamond
It is important to understand why diamonds, in particular, became so popular in the 20th century specifically. In 1888 De Beers, one of the most infamous names associated with the modern gems trade, stockpiled mined diamonds. This created a scarcity in the market place which enabled the company to control the prices.
Consequently, diamonds took on the persona of much sought after, and, consequently, an extravagant and meaningful purchase for the average American. With clever marketing the diamond took its place as an aspirational product with huge amounts of sentiment attached to them. It was De Beers that came up with the slogan ‘A Diamond Is Forever’, permanently linking them to the values of love, marriage, commitment and legacy.
When you consider that in 1939, just 10 per cent of US brides received a diamond engagement ring. By the 1980s, this proportion had risen to 80%. A diamond ring had become the standard symbol of a declaration of love – a brilliant marketing job on behalf of De Beers.
Today the diamond industry may still have the same image, and the narrative behind giving diamonds as a gift maintains the same, but as a stone, everyday diamonds do not hold the same value. Also, synthetic diamonds are easily replicated in a lab, which in a world which is becoming increasingly sensitive to the ethical and environmental damage of mining.
Gold – a metal that holds its value
There is a reason why so many wealthy countries originally linked their economies to ‘gold standard’. Tracing the history of coins back along the centuries, the possession of gold was a guarantee of wealth and power which many countries adopted by keeping reserves of gold bullion.
However, the turmoil of the early part of the 20th century saw countries pulling out of the gold standard, and after the Second World War an international monetary agreement was made at the Bretton Woods Resort to fix currencies to the US dollar.
However, for investment purposes, gold continues to be a sound investment. Although it displays volatility in the short term, over the long term it not only maintains its values, but has grown steadily, despite the uncertainty and unpredictability of global markets.
Equally, gold has that scarcity that De Beers engineered in diamonds. In the earth’s crust, there is approximately 0.0038 parts per million (as opposed to copper, which is 55 parts per million). For this reason, there is a solidity and tangibility to owning gold that cannot be replicated with other precious metals.
Spotting a gem amongst the gems
While it is possible to make money from investing in gems, it is a much more volatile, unpredictable and specialized area. Even the most experienced of gemologists can get caught out by buying in the hope that a gem will increase in value, only to see that value tumble dramatically. Interestingly, trends indicate that lower priced gems, if purchased wholesale, can receive a higher markup than more expensive gems.
However you decide to invest, be prepared for volatility and unpredictability and follow the markets closely. Most important is that you love the pieces you are buying because as well as the monetary value, there is also the sentimental value – and that can be priceless.