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Seven expert arguments against buying diamond jewelry

08 november 2012

Internet newspaper The Huffington Post published seven reasons of diamond expert Ira Weissman in support of why, in his opinion, to buy diamond jewelry is a waste of money.

Weissman worked in the diamond business for over ten years. He bought and sold diamonds in Dubai, Mumbai, Moscow, Hong Kong, Paris, Stockholm, Madrid and Barcelona.

The expert’s arguments are as follows:

1. The most common misconception about engagement rings is that they're some kind of ancient tradition that's deeply embedded in human history in societies around the world. This is completely false. The idea of a diamond engagement ring is roughly a century old. Guess who invented the concept? Not surprisingly, it's the same people who mined the diamonds - the De Beers diamond syndicate.

In this case De Beers spent millions upon millions convincing the public that they needed to buy a product that they basically created out of thin air.

2. Diamonds are not an investment - they are a retail product like any other. People explain away spending thousands of dollars on a little stone because they mistakenly believe that the diamond is a solid investment. Are there any other investment classes where the person selling you the asset makes a minimum 10 percent profit margin (usually much more)? Most people would be lucky to get half of what they paid if they tried to sell a ring the day after they bought it. Don't fool yourself into thinking that buying a diamond is a safe place to put away money for a rainy day.

3. The diamond jewelry market is a shark tank. Even consumers that spend hours online learning about diamonds can easily get screwed by one of the many unscrupulous dealers out there.

4. Spending a month's (or two!) salary on something so impractical - at the exact same time you are beginning your new life together as a budding family - is a very poor financial decision. The expenses only grow with time, they don't get easier! Believe me, five years later, you'll be wishing you had a spare five grand lying around.

5. Men, you don't need to waste a ton of money to prove your manhood. If Mark Zuckerberg can forgo the diamond engagement ring, then you can too.

6. Women, you don't need your man to waste a ton of money to prove that he loves you.

7. If your man buys you a diamond as a means to keep you quiet for another year about marriage, he probably should be dumped anyway. Find someone more grounded who is excited about building a life together with you - not someone who's trying to continue being single while taking you along for the ride.

Weissman had consciously left out of this list any arguments about immoral practices in the diamond business (i.e., blood diamonds, unfavorable working conditions, and child labor). The odds of buying an actual blood diamond in developed countries are extremely low.

It's rather amazing, the expert concludes, that the very people who buy and sell millions of dollars worth of diamonds a year acknowledge the ephemeral nature of their value at the same time that their lives are completely invested in them.

Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished