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Why Diamonds are Not a Good Investment

March 4, 2025

“Diamonds are forever.” 

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The De Beers name is most famously associated with the diamond industry rather than a specific family.

The company, De Beers Group, was founded in 1888 by Cecil Rhodes, a British businessman who initially secured funding from the Rothschild family. However, Ernest Oppenheimer and his descendants are the ones who later turned De Beers into a diamond empire.

De Beers & Diamonds:

• Early History: The company started in South Africa, where massive diamond deposits were discovered in the late 19th century.• Oppenheimer Control: In the 1920s, Ernest Oppenheimer took control of De Beers. His family ran it for nearly a century, making De Beers synonymous with diamonds worldwide.

• Diamond Monopoly: For much of the 20th century, De Beers controlled around 80-90% of the global diamond market through a cartel system that dictated supply and prices.

• “A Diamond is Forever”: In 1947, De Beers launched this iconic advertising campaign, cementing the idea that diamonds are essential for engagement rings and everlasting love.

De Beers Today:

• Loss of Monopoly: In the early 2000s, De Beers’ dominance declined as new competitors emerged, and antitrust regulations weakened control over the diamond supply.• Shift in Strategy: The company now focuses on branding, ethical sourcing, and lab-grown diamonds through its Lightbox brand.

• Ownership: Today, De Beers is jointly owned by Anglo American plc (85%) and the Botswana government (15%).

Though De Beers no longer has an absolute grip on the diamond industry, its legacy in shaping the modern diamond market is undeniable.

Diamonds are generally not considered a great investment compared to traditional assets like stocks, real estate, or gold.

Here’s why:

Reasons Diamonds Are Not the Best Investment:

1. High Retail Markup & Resale Value Loss – When buying a diamond, you often pay a high retail markup. If you try to resell it, you’ll likely get much less than what you paid.

2. Lack of Liquidity – Unlike stocks or gold, selling a diamond can be difficult, as there isn’t a standardized resale market with transparent pricing.

3. Depreciation – Most diamonds lose value the moment they leave the jewelry store, similar to how a new car depreciates after purchase.

4. Market Volatility – The diamond market is controlled by a few major players, which can artificially manipulate supply and prices. Additionally, lab-grown diamonds are becoming more popular, reducing demand for natural diamonds.

When Diamonds Could Be a Good Investment?

1. Rare & High-Quality Diamonds – Extremely rare diamonds, such as fancy-colored ones (pink, blue, or red), can appreciate over time.2. Portable in Economic Uncertainly: – While not ideal for quick profits, diamonds can serve as a portable store of wealth, especially in times of economic uncertainty.

Bottom Line:

Diamonds are better suited as luxury purchases rather than financial investments. If you’re buying one, it should be for personal enjoyment rather than as strategy to grow wealth.

Please keep in mind this information should not be considered as financial advice. Investment decisions should be based on individual research and consultation with a qualified financial professional. The value of investments can fluctuate, and past performance is not indicative of future results. Always consider your risk tolerance and financial goals before making investment decisions.

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About The Publisher

Jeff Corbett
As entrepreneur, author and magazine publisher with over 25 years’ experience in the global marketplace, I enjoy writing as an advocate for international business and personal freedoms. Thanks to my experiences building businesses I also have a tremendous interest in reading or writing about motivation and self-discipline.