Love your diamonds, don't invest in them

The other day I went diamond shopping.

Let me re-phrase. My friend went shopping for diamond jewellery, I tagged along for the ride.

And, much to my surprise, I was bowled over. An exquisite Stephan Hafner bracelet of white gold in an irregular shape, studded with black and white diamonds took my breath away. A love-at-first-sight, passionate, but completely one-sided, encounter ensured for precisely the next 10 minutes.
After fawning over it and trying it on, I let it go with the declaration that I don’t wear hand jewellery. Which was the truth. What I did not disclose was that even if I did attempt to change my style, the price tag of Rs 5 lakh was sufficient deterrent.

My friend attempted to persuade me otherwise with the spiel that jewellery is a good investment. Which in my book is utter nonsense. Men buy jewellery for women. Women buy jewellery for themselves. None do it from an investment point of view. 

So why do men buy jewellery for women?

In his book Call of the Mall, Paco Underhill claims that jewellery has traditionally been purchased by men for women for one of three reasons:

1) Keys to the front door: When men want to make blatant declarations of affection or intention they gift jewellery on special occasions - engagement, marriage proposal, anniversary, birthday.

 2) Keys to the back door: When they need the convenience of a relationship but want to bypass all the commitments that come with front-door entry. Hence, mistresses, secret lovers and girlfriends are recipients of jewellery.

3) Keys out of the doghouse: This is their way of saying sorry and want to make amends for bad behavior. Flowers wither too quickly, perfumes don’t last forever and chocolates will only make you fat. Nothing says “sorry I have been a jerk” better than a fine necklace or diamond earrings.

Why do women buy jewellery for themselves?

1) To show off their own personal wealth

2) To show off their husband’s wealth

3) To strike envy in the heart’s of others

4) To feel good by doing either one or all of the above

Of course, I make allowances for one exception here. If you have amassed a great collection and achieved iconic celebrity status in the bargain, then jewellery is a great investment. In December 2011, Christie’s New York conducted an auction of Elizabeth Taylor’s jewellery. The sale drew unprecedented interest from bidders throughout the world with 36 different countries represented during the four days of live auctions. It fetched $156.8 million!!!

Back to my doggedly relentless friend. “So why can’t you invest in that bracelet? You can wear it. You can sell it should the need arise. And, for heaven’s sake, you loved it!”

Because, my dear, I will not invest in anything I love; it would break my heart if I have to sell it. Even Elizabeth Taylor got her collection sold after she was no more.

So does that mean I would never invest in jewellery?

Let me put it this way.

When I buy jewellery, it is to wear it and flaunt it. Precious stones and precious metals are meant to grace the body. I don’t expect to recoup their value by reselling one I bought at the retail level at a very high mark-up. At a resale, I will never get the true value of the investment.

When I want to invest in precious stones and precious metals, I look towards mining companies. Because then I am completely non-emotional in my decisions. But it also means that I am not buying the precious metal or stone directly, I am buying into a company that mines it.