March 6, 2009
They say that there are no atheists in foxholes. Well, I got news for you, there are no atheists or single men in foxholes! When bullets are flying, like the collapse of our economy, loss of wealth, rise of unemployment, women having octoplets (come on did you really need to complete a baker’s dozen plus one?), more and more couples are tying the knot! You can lose your job, your home, your pension, your life savings, but nobody, and I repeat, nobody wants to lose love! We can learn to live without a lot of things but love will never be on the list!
The good news is that for the first time in 28 years the price of “good” diamonds (defined as a diamond that will hold its value and/or appreciate over time) has DROPPED almost 6% over the last four years! This may not seem like a lot, but let me give you an example. The average “good” diamond sold in the United States in 2005 was a little less than half a carat and normally sold for $1700.00. This diamond would have traditionally appreciated in value/cost 6 ½% to 8 % per year. Translation to buy that diamond in 2006 would cost you not $1700.00 but a maximum of $1836.00! Then in 2009 it would cost $2312.83! That’s where the powers that be get you! “You’d better buy a diamond today because tomorrow it’s going to go up!” And, for “good” diamonds (not crummy ones) they were telling the truth! You can pay a little now or a lot more later. Your choice! Since the diamond market is not a free market (more of a monopoly) the dealer (Diamond Cartel) is holding all the cards! They wanted to raise the price and they did! Just like when the oil cartel kept manipulating the market to get oil to $147.00 a barrel-before it collapsed! Well, guess what? Supply super-exceeded demand! For the last few years diamond prices for the bread and butter sizes-1/3 carat to ¾ carat-have been flat! Then, the sky-rocketing prices of the one carat and larger stones that were being bought up as “safe havens” by investors, exiting the stock market are falling back to earth. Investors are now trying to dump their stock piles realizing cash is king!
What does it mean to you the average young man that wants to buy an engagement ring? It means the diamond you would have paid $2312.83 for this year is selling at 2004 prices! Or $1581.00! That is a $731.83 savings! Almost 50%! So when I say diamond prices are down 6% and you want to yawn, I am talking about 6% off of 2005 prices!! If you are looking for a big diamond, the savings are off the charts! If you followed my advice from May of last year when I recommended to hold off on making your diamond purchase (reference the Great Diamond Crash) you are in the money now!! You can actually buy a good beautiful, sparkly, gorgeous diamond without going to the poor house! Don’t get me wrong, good diamonds aren’t being given away; in fact they are still 300% more expensive than commercial grades (crummy diamonds). But they are at least affordable in dream sizes! So if you are like most couples these days and realize that it’s better to stay together and work as a team, now is the perfect time to buy your rock! Mark my words you will never see diamond prices like this again in your life time! People can live with a lot of things but regret isn’t one of them. Sometimes love means letting go but right now isn’t one of those times! Don’t let your love go, it may not come back!
by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.”
More questions? Ask the Diamond Guy®
NBC Nightly News April 19, 2009