While there’s a common belief that diamonds are a solid investment, the reality is more complex. Over the long term, diamonds have increased in price, but other factors, such as inflation and the retail markup, make it unlikely that the average diamond will significantly appreciate in value.
- Historical Trends:The price of diamonds has risen over the last several decades, but inflation has offset much of that gain.
- Better Alternatives:From an investment perspective, diamonds don’t perform as well as stocks or bonds. For example, $1,000 invested in the stock market in 1960 would have generated far greater returns than buying a diamond.
In short, while diamonds have sentimental and luxury value, they aren’t the best choice for financial investment.
