Diamonds in essence represent value in one way or another as they are either valued for the price that was paid for them or due to their personal significance to the average individual. Diamond rings (mainly diamond engagement rings) or diamond necklaces are in most case scenarios bought and given as gifts that represent personal commitment to another individual, in other cases as a form of investment value or even self-reward as personal reflection of social status or achievement.
The most significant aspect of diamonds at one point in time was their role as symbols of commitment in engagement rings and to a certain degree, they still are for some. However, the new generations especially the millennials and Gen Z for the most part do not share the traditional view of the natural diamond engagement ring mainly attributed to the high price of these gem stones that in turn are linked to their scarcity and high cost of acquisition via mining activities.
Tangible Value of Diamonds
From the tangible perspective, diamonds are similar to precious metals such as gold due to their scarcity as a finite Resource. Diamonds have become increasingly scarce due to centuries of mining. It is the scarcity of diamonds and the high cost of mining them that gives diamonds their value in terms of price. In other words, the scarcer they become, the higher their value. Many investors turn to diamonds in order to enhance their investment portfolio due to the store of value that these gems possess.
The value of investment grade diamonds has had a long history of holding value and in general are unlike other investments as they are not susceptible to market fluctuations and interest rates. Another factor that makes diamonds a good investment is their portability. Diamonds are in fact physical assets that can be transported and stored easily rendering them as highly liquid assets.
Intangible Value of Diamonds
On the flipside the intangible value of diamonds, especially diamonds that are set in jewellery such as engagement rings, necklaces or pendants are often timeless symbol that represent love and commitment. However, it is important to realise the fact that, it is the tangible value of diamonds that afford the high status of the gem’s intangible value. This is because, diamonds are pricey and a few decades ago, it would take the average person months or even years to save up enough money to buy an engagement ring with a beautiful diamond crowning it.
The diamond engagement ring was a tradition among the elite society five centuries ago when Archduke Maximillian of Austria proposed to Mary Burgundy with a diamond ring, and only become a tradition among the masses in the early 20th century. Among the reasons for this phenomenon to catch on among the masses was due to the clever marketing strategies that was deployed by luxury brands such as Cartier and De Beers that established emotional connections between diamonds and consumers.
