Your Money: Diamonds are for love, not for money

What will your Valentine be left with after the roses have wilted? Wise investors are looking at second-hand gems and the status of their life policies

THE DIAMOND, we are told, is the ultimate gift of love. "The very word 'diamond' comes from the Greek adamas meaning unconquerable, suggesting the eternity of love," oozes De Beers in its promotional blurb.

This week lovers up and down the country will succumb to the mush, and go out and buy jewellery for their darlings. Valentine's Day traditionally hails a stampede to the jewellers and the hardiest buy an engagement ring to demonstrate their long-term commitment.

Yet while diamonds themselves may be for ever, and other precious stones are themselves pretty durable, their actual monetary value once bought, is likely to plummet. Jewellery is rarely a good monetary investment.

A retailer will mark up a new diamond ring by 50 to 100 per cent, and it could lose over half its value the moment you leave the shop. Even with a high quality stone bought at virtually wholesale rates in Hatton Garden, it will probably take five years to get back to par.

Investment in new jewellery should be seen, then, largely in terms of gaining your partner's goodwill, and not as acquiring an asset. "People should buy jewellery because they love it, or they want to give it to someone they love," said Alexandra Rhodes, jewellery director at Sotheby's. Buyers should beware any retailer trying to represent a purchase as a good investment. Hence the emphasis on intangibles such as love, eternity, and luxury - rather than outright value for money - in De Beers' massive advertising campaigns.

Over a longer period the value of high quality diamonds with good settings has outstripped inflation, while gold has tended to lag. Even so, when the ex-wife of the Aga Khan recently sold the 13 carat, heart-shaped Begum Blue diamond for pounds 4.6m, she was said to be looking for a better investment alternative.

One way of avoiding the retailer's mark-up is to buy antique or second- hand jewellery at auction. James Nicholson, senior jewellery specialist at Bonhams auctioneers, says punters can save between two-thirds and nine- tenths of retail prices by buying this way.

Further, if you know what you are looking for and your timing is right, you can make considerable gains. Take, for instance, cocktail jewellery from the Forties and Fifties. Before 1987 the stuff used to be broken up as unsaleable. Then prices shot up with the sale of the Duchess of Windsor's collection.

Jewellery often moves in step with with clothes fashion. In its last jewellery sale Sotheby's got three-and-a-half times reserve prices for Sixties and Seventies pieces from the collection of designer Andrew Grima.

But you have to be an expert, or very lucky, to succeed in this sort of speculation.

Jack Ogden, of the National Association of Goldsmiths, says if you want your jewellery to gain value in the long term, buying quality of stone is more important than quantity. If you pay little you can expect the Gerald Ratner proverbial. De Beers recommends four criteria for diamonds - weight, clarity, cut and colour. But with 3,500 categories of colour alone, you will probably need expert advice.

It is probably best to get advice from a member of a trade association - such as the National Association of Goldsmiths or the Incorporated Society of Valuers and Auctioneers. The Goldsmiths vet members on admission, and have a mediation service for customer complaints.

If a customer believes he or she has been had, they may seek redress under civil law. Local trading standards departments may also prosecute. The 1979 Sale of Goods Act requires products to be sold as described. It is, therefore, important to get a full description of the goods at the point of sale. For stones, especially diamonds of half a carat upwards, more and more jewellers are now issuing certificates testifying to their quality and cut. However, it is more difficult to prove that you have paid too much if the description is accurate: the valuation process is very subjective.

If buying jewellery for your loved one is beginning to sound too much like hard work, one city stockbroker suggests you get her some De Beers mining shares instead. Their long-term performance beats the actual stones hands down.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger is in Argentina having chemotherapy

Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

PROMOTED VIDEO
News
peopleThe Times of India said actress should treat it as a 'compliment'
News
news

Watch this commuter wage a one-man war against the Circle Line
News
We are phenomenally good at recognising faces; the study showed that humans have been selected to be unique and easily recognisable
science

Human faces unique 'because we don't recognise each other by smell'

Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show?
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Arts and Entertainment
Emma Thompson and Bryn Terfel are bringing Sweeney Todd: The Demon Barber of Fleet Street to the London Coliseum
theatre

Returning to the stage after 20 years makes actress feel 'nauseous'

Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week