Why your diamond engagement ring is NOT an investment

Your ring is certainly an emotional investment in your future.  What it is NOT, is a financial investment.  It is a mistake that lots of people make.

Many people are very confused by the idea that jewellery may cost a lot but does not really have a fixed ‘value’ once they have bought it. Some get quite angry when they finally discover this hard fact of life.  Much better to know it now than discover it later.  

not an investment

First of all, a definition.  An investment is only a financial benefit if it is realised, ie sold.  Under what circumstances do you think you might ‘realise’ the value in the engagement ring you are buying?  This one is for life n’est ce pas?  If you want a financial investment buy government bonds or gold bars if you have to, they at least have a clear market value at any given time.


The market for second-hand jewellery is more like the market for second-hand cars.  Except that the market for second-hand cars is probably better. A second-hand car of any given condition has a known utility value to its potential buyers.  There is ‘Glass’s Guide’ and many online tools for comparing the value of second hand cars.  For a given age, mileage and condition (assuming no serious faults) they are more or less a known quantity.  Not so second-hand jewellery, and specifically not second-hand diamond engagement rings.

Unless it is a ‘vintage’ purchase, many people have a superstitious or at least emotional objection to buying a ring which may be available because an engagement or a marriage has broken down.  This would be especially so if the ring had never been worn, so was in perfect shop-bought condition.

If you had to sell a brand new car the minute you drove it off the forecourt, percentage wise, you might lose say 20% of the price you paid.  If you try to re-sell an engagement ring immediately after you’d bought it, you will be lucky to realise 40% of the purchase price if it is under 1.0ct, ie it could ‘lose’ around 60% of its ‘value’. Why?

seccond hand rose

Well, it’s pretty much down to supply and demand and there isn’t much enthusiasm for second-hand engagement rings from the people, ie the ladies, who would be wearing them.

So, the people most willing to buy such rings are usually jewellers who dismount the stone and send the metal for scrap.  The same jeweller can buy a new diamond, in perfect condition, together with its original certification at cost.  So a second hand diamond, which may need repolishing or recutting and might then have to be recertified is less attractive.  Even in perfect condition with the certificate, it would still be a second-hand diamond to the end purchaser.


The wholesale market prices of diamonds, gold and platinum as commodities do go up and down, in line with the laws of supply and demand.  The prices of gold and platinum tend to be linked to the health of the world economy, because gold is a hedge against currency fluctuations, although control of supply does play a part.  Whilst the price of diamonds depends on fashion and marketing, and is maintained at an artificially high level because supply is rigidly controlled by big diamond producers like De Beers.

You might have better luck in maintaining the value of your ring if it is a lovely, and fairly large ruby, sapphire or emerald, as these are much less of a commodity and more individual than diamonds.  But even here, most of the other caveats will still apply.

So, don’t spend more than you are comfortable with on a ring, and please don’t ever think of it as a financial asset!

For more information on gemstones and ethically sourced alternative stones see: juliepeel.co.uk/Diamonds_and_Gems/Precious_Gemstones

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Julie Peel

About Julie Peel

I am a jewellery designer. I specialise in Bespoke Rings using ethically sourced diamonds and gemstones and I am a member of the Responsible Jewellery Council. My clients want something different and of personal significance to them, so I design unique pieces and source unusual precious stones for my ring designs. I offer personal design consultations in Central London, and Surrey, but also by Skype and other media.

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