INvesting in diamonds

[gregchang35]

Any PS'ers investing in diamonds?

I know that some invest with it in the jewelry pieces, and others dont, and others with fancy coloured diamonds... so i am starting a poll on this..

 

[HopeDream]

Diamonds aren't considered an "investment". They are a consumable good, and they loose 30-70% of their value the moment you walk out of the store.

Some Diamond sellers like to market diamonds as an "investment" but you are really better off with index funds.

 

[kenny]

I did not answer the poll since I do not "invest" in diamonds any more than I invest in vacations.

I collect loose FCDs, and even bought Red, Green and a Blue with no secondary hue modifiers that were graded fully natural by GIA, (the most rare of all diamonds) but I never think of ANY diamond is an investment.

You and I must buy at retail but must sell at wholesale.
It's like driving a new car off the lot and kissing thousands of dollars goodbye.

So much for the "investment".

Buy diamonds because you love and enjoy them.
Enjoyment is a nice investment!

 

[gregchang35]

Yes agreed with comments above...

Enjoyment is probably a better term.
Sadly, its too late to change the topic.

 

[HopeDream]

Ah! Thats a very different question!

Currently I`m enjoying my engagement diamond with plans to upgrade eventually.
I`d like to own some old cuts one day, and a lovely purple or blue FCD.

Any of my diamonds are / would be set so I can wear and enjoy them.

 

[gregchang35]

Ah! Thats a very different question!

Currently I`m enjoying my engagement diamond with plans to upgrade eventually.
I`d like to own some old cuts one day, and a lovely purple or blue FCD.

Any of my diamonds are / would be set so I can wear and enjoy them.

I love diamonds and glad that i have foudn this forum as i now see guys wearing dimaonds. i htought i was odd... well, i am..bb but that is another story!!!!

A silly question= How do you upgrade diamonds?

i know some vendors have lifetime guarantee or upgrade policy (assuming it is the same condition as it was bought).. if there is no upgrade policy on the diamond that you have purchased, then, i will have to sell the diamond (wholesale) to the vendor for the upgrade. Or sell diamond on other websites.

is that right? only curious.. i have no intention (at this time ) of upgrading my diamond studs....

 

[HopeDream]

Yes those are generally your options, although once in a blue moon, if you have a stone that is well cut and meets the vendor's selection criteria they make take it on consignment or accept it for trade in (This almost neve happens but you can always ask).

The challenge for a vendor is tying up money in inventory that may not sell, so if your stone is un-papered or isn't quite up to PS precision cut standards don't expect to be able to do a trade-in.

I believe Jewels by Erica Grace also accepts consignments (and probably others too), so if you wanted someone else to handle a sale for you, you do have that option.

 

[gregchang35]

Yes those are generally your options, although once in a blue moon, if you have a stone that is well cut and meets the vendor's selection criteria they make take it on consignment or accept it for trade in (This almost neve happens but you can always ask).

The challenge for a vendor is tying up money in inventory that may not sell, so if your stone is un-papered or isn't quite up to PS precision cut standards don't expect to be able to do a trade-in.

I believe Jewels by Erica Grace also accepts consignments (and probably others too), so if you wanted someone else to handle a sale for you, you do have that option.

THanx!

 

[Paul-Antwerp]

While I agree that a consumer should not buy diamonds as an investment, I think that the investment-question should be a factor in the purchase-process nevertheless.

As a cutter, I do not think of it that way, but I am definitely investing in diamonds. Simplifying the business-model, I am buying diamonds counting on selling them for a higher price later on. I would think that this is the classic definition of investing. But that is beside the point I wanted to raise.

When a consumer purchases a diamond, it is very good that the investment-factor is not the major factor in the purchasing-process. Enjoyment of wearing the diamond, or of giving it away, is undeniably a much more important factor. However, diamonds essentially are a product that is very good in keeping its 'value'.

Compared to a mechanical product, diamonds do not lose 'value' because of malfunctions after a few years of usage. And it seems that the danger of a new competitive product suddenly turning diamonds obsolete is rather low. For some reason, typewriters do not exist anymore, but diamonds are still in style.

Considering diamonds and global economies over a very long period of time, it can be foreseen that diamond-prices will go up considerably. Markets might even shift in such a way, that in say 50 years, the average American household cannot afford the current average US-sold diamond anymore, and local fashion for diamonds might be totally different from today's.

Inevitably, at some point in the future, your children, grand-children or great-grand-children will look at the diamond you buy today, and they will prefer to turn it into cash, instead of keeping the family-heirloom. And your purchase-decision today is going to hugely affect the result of their future sale.

If I see today that as a cutter (and thus investor) for seemingly similar diamonds on paper, I would pay $10,000.- for one and only $5,000.- for the other, that spread is probably an indication of what can happen in the future.

For instance, the correct paperwork from a reliable lab is a start, but given that the value of reports decreases with their age, where exactly a diamond is within the color- and clarity-range of their grade will have a major effect on their future return.

The true cut-quality of a diamond is probably going to be even a bigger factor. Where carat-weight, color and clarity can be considered constants over-time, cut-quality is not. Virtually all labs worldwide have introduced and/or changed (strictened) their cut-grade-criteria in the past fifteen years. This evolution is not going to change, especially if one considers that science is only at the beginning of understanding Fire and Scintillation.

According to me, every diamond-consumer should always ask their vendor for their buyback-policy. That is a clear indication how that vendor truly values the stone. His buyback is directly linked to how much he is willing to pay for that stone, as a professional 'investor' wanting to re-sell it later on. If he would say for seemingly similar stones, 50% for stone A and 70% for stone B, wouldn't that be a decision-factor in a consumer's purchase? I venture to say that it would be eye-opening info for the consumer.

Live long,

 

[denverappraiser]

‘Investing’ is a tricky concept and I think it’s important to have it in context. To be sure, it’s possible to make money buying and selling diamonds and I know dozens of people who make a living doing just that, including some of my best friends. The key distinction is that, in every case, a talent is being applied here. Some jewelers do a LOT better than others at this and the difference is NOT the gemological properties of the stones. ‘Investors’ tend to dismiss this as irrelevant the same way they do with stocks or gold bullion. One AT&T stockholder is not ‘better’ at buying and selling their stock than another. The difference in buying and selling price has to do with a small commission, a tiny spread in the market, and a bunch of things that are entirely outside of the control of the investor. Diamonds are very different. Buying diamonds is easy. Selling diamonds is HARD. Buying at retail and selling at below wholesale has a typical ‘spread’ that’s 50% or more. It’s occasionally possible to bring this down by buying right, by selling skillfully and by adding a bit of luck but it’s a stretch and the way the pros do it is replace luck with skill (plus luck). Paul, you are not so much investing in diamonds as you are investing in your own talents and the talents of your team. You work at it full time and you commit significant amounts of time and money to making it happen. This is not a passive investment and even then it’s not without considerable risk. I sincerely hope it continues to go well for you but an ‘investor’ would be hard pressed to replicate your approach and the closest they can come is by investing in your company or with one of your competitors, partners or suppliers.

I also disagree with the claim that diamonds do not depreciate. It’s not that the stones themselves change over time other than with damage and a 20 year old diamond will remain as beautiful as the day it was ‘new’ but the marketplace changes. Diamonds are a fashion driven item. 30 years ago, marquise’s were hot. They sold at a premium over other shapes. Now not so much. 10 years ago, princesses were hot. They accounted for something like 30% of the market. They’re far less so now. Emerald cuts seem to be coming back. 10 years ago they were almost nothing. 80 years ago they were a considerable share of the stones. Fancy colors have become significantly more popular and the prices reflect this but this rise is because of fashion, not because the stones have become somehow better or more scarce than they used to be. Will they continue to climb? Maybe, but maybe not. Will the current trend towards ‘super ideal’ sorts of cutting and identifying ‘eye visible’ clarity continue to drive the market? Maybe, but this has not always been the case and it will surely change in the future. It always does. Predicting what will be popular in a decade is not an easy task and is a job for a psychic, not a gemologist.

 

[TitanCi]

Oh great! NOW you tell me after I just bought $2.38 mil worth in loose stones?

Geez.

 

[Paul-Antwerp]

Neil,

When you highlight 'fashion-aspects' as a reason for potential depreciation of certain diamonds, you are mainly talking about attributes of polished diamonds. I think that you are right that the fact of a specific shape or cut going in or out of fashion might well have a negative effect on the future value.

On that basis, rough diamonds in general carry much less of such 'fashion-risk', and they probably are, for a knowledgeable person in the matter, a far better investment-vehicle.

Live long,

 

[kenny]

As a cutter, I do not think of it that way, but I am definitely investing in diamonds. Simplifying the business-model, I am buying diamonds counting on selling them for a higher price later on. I would think that this is the classic definition of investing.

You are buying rough and adding value by polishing it.
That's not investing.
That's a manufacturing business.

 

[denverappraiser]

Neil,

When you highlight 'fashion-aspects' as a reason for potential depreciation of certain diamonds, you are mainly talking about attributes of polished diamonds. I think that you are right that the fact of a specific shape or cut going in or out of fashion might well have a negative effect on the future value.

On that basis, rough diamonds in general carry much less of such 'fashion-risk', and they probably are, for a knowledgeable person in the matter, a far better investment-vehicle.

Live long,

Theoretically you're correct but investors have no easy access to either buy or sell rough diamonds. They also have no good way of evaluating the goods. It's actually worse than with polished in this regard. They are 100% reliant on the vendor and the buyer. This is an extremely awkward position and it's packed with potential perils. As with the above, if they have the talent and connections to do it and/or have partners who do, it's possible to make money here but the investment is in the business venture, not the merchandise. Is a particular diamond venture a good investment? Maybe? Some surely are and some surely aren't. The evaluation is about the management team, the business model, the competition and a list of other things that are most definitely NOT gemological properties.

You are not investing in diamonds. You are investing in your business and are hoping that through your talents and those of your team you can make a buck at it. I sincerely hope you do well but no, I would not describe you as an 'investor' in diamonds in the classic sense.

 

[Paul-Antwerp]

I think that we have a language-disconnect here, and I fail to clarify my point correctly. I am not trying to portray myself as a diamond-investor, I just want to bring up the point that in every diamond-purchase, there is an aspect of investment. Let me give it another try.

For ourselves, when buying starting-stones (no matter if they are rough or already polished), we are making that purchase indeed based on our knowledge of diamonds and the fact that we can add value to those stones. In the process, we reject stones that are simply too expensive for us for various reasons.

Part of the decision however hinges on the presumption that the 3 C's of rarity (carat weight, color and clarity) remain somewhat constant in pricing throughout the process, starting with our purchase and ending with our sale. Since these 3 C's (the 'rough' C's) dictate the majority of our purchase-price, that is a critical assumption, and while we hope that our process is short-term, I consider this assumption (diamond-prices need to stay constant) as the investment-factor in our purchase-decision.

For consumers, the decision-process is different. Making a comparison to cars, indeed, a new car loses half of its value the moment you drive it off the lot. With diamonds too, as soon as you are in the consumer-position of wanting to sell your diamond, you are in a different ballpark. But with cars, there are brands for which the second-hand-value is much better than others. In Europe, for instance, a Volkswagen or Mercedes can be more costly at purchase, compared to a similar model of another brand. But consumers buying these cars argue that they do not mind because the second-hand-value of VW and Mercedes is much higher, and this is part of their purchase-decision. According to me, that aspect of their purchase-decision is an investment-decision.

In consumer-purchases of diamonds, I think that a similar investment-aspect is present in the purchase-decision. Or at least, it could be. I see hundreds of diamonds bought here with the assistance of PS. Often, I see stones recommended, for which I would gladly pay 80% or more of the sales-price, were these stones offered to me for resale. In the same way, I see stones bought, for which I would only pay 50cents or less on the dollar. I think that such information would be interesting for consumers in their purchase-process. It is however something that vendors apparently avoid or fail to communicate.

Summarized, I am not advocating to see diamonds as an investment, in no way, but I do believe that in every diamond-purchase, whether by professionals or by consumers, there is an aspect of investment involved, possibly not always conscious though.

I hope that this was clearer in some way.

Live long,

 

[denverappraiser]

Paul,

Thanks for the clarification. Even in rough, cutting matters. How? You buy diamonds with good economic potential to become Infinity’s. Not all do, in fact most don’t, and you are using your expertise to select them wisely. Nearly every stone of an appropriate color/clarity COULD become an infinity, but the yield on most will be better for a cutter using a different business model. It’s fundamentally an auction and someone else will outbid you on the ones they believe will work better for them while you will bid strongly on ones that will work best for you. It’s all good. Indeed, stones where you are buying polished goods and recutting highlights this. Some other cutter already bought it, they had a different plan, and they proceeded with it. That doesn’t mean this first guy was wrong or even a bad cutter. We’ve advance the clock a few years or decades and the situation changed. The right cutting decisions then may not be the right decisions now, and yours may not be right in another 40 years when someone else looks at it.

I agree that the investment/resale component is an important topic and it’s a subject that I get asked about regularly as an appraiser. It’s a tricky area because ‘value’ is almost always included as part of the sales pitch and usually what I have to say on the topic is at least subtly different from what the seller said. Occasionally it’s extremely different. This is one of the areas where advice from a competent and independent appraiser can be enormously valuable. Although I agree that the buy-back policy at the store is an interesting data point, selling back to the store where they bought is NOT the usual resale path for consumers. The majority of stores don’t buy from the public for a variety of good reasons and those who do usually want to buy very cheaply, also for perfectly valid reasons. The stores know this and they deliberately avoid the conversation. That doesn’t make them crooks or even a bad place to buy diamonds, but it probably does make them a bad place to sell them. This is not so different than your car example. Buy a Mercedes if you want one but when it comes time to sell it, you probably aren’t going to be selling it back to the dealership, especially if we’re not talking about a tradein where the deal is bundled with a new purchase.

 

[Paul-Antwerp]

In certain European countries, Mercedes operates a 'Nearly New Car'-network, for cars up to 3 years old, and it seems rather popular.

Buying a new Mercedes, or leasing one, Mercedes will put a buyback-value on the car, obviously with limitations. The system actually makes the second-hand-sale back to the Mercedes-dealer the most opted-for situation.

BMW apparently has copied the system, and calls it 'BMW Premium Selection'.

In essence, I think that such systems have changed the dynamic for young second-hand cars of these brands, putting a relatively high floor on their resale-value. Most probably, at the initial purchase, it offers great peace-of-mind for the consumer, basically making the investment-aspect of his purchase relatively easy.

Just a side-note.

Live long,

 

[denverappraiser]

I would fully expect supply to be the problem here but I'm not surprised that selling prices hold up in that system. It's hard for me to imagine very many people buying a new Benz and selling it again within 3 years other than perhaps the rental car agencies but that sort of behavior certainly keeps the economy buzzing and I'm sure Mercedes encourages it to the extent that they can. At least in my neighborhood, people keep cars quite a bit longer than that. Harley Davidson has a similar sort of program here for bikes up to 10 years old. A H-D dealership has the opportunity to do a certain amount of repair and inspection that results in the bike being 'certified' and covered under a factory issued warranty. That is to say, there's a value-add being applied by both the dealership and the factory at the end. This is an advantage to the dealers but I'm not so sure it helps consumers all that much since they MUST sell to the dealer to get into the program and obviously the dealer is doing this deal at a profit. I have no way to know if the dealers are paying the factory for that warranty but surely they are and it wouldn't surpise me if it was a significant fraction of the value of the bike. I hear advertisements for a program like this from Toyota but I've never looked into the details.

 

[Paul-Antwerp]

Rental cars are not that important here as a car-market, but company-cars in the sense of a car-for-private-use provided by your employer are a huge segment of our car-park. Most probably also because for an employer, tax-wise, it is cheaper to give part of the salary in the form of a car.

Those cars generally are re-sold quite early in their life-span. This creates a relatively high level of supply. Because of the renewed warranty of the program, and the fact that Mercedes repairs everything before putting the car in the NNC-program, these second-hand cars are very popular again with consumers. On the parallel market, young Mercedes-cars are frowned upon, because of the question-marks attached to not having a warranty, nor a check by Mercedes themselves and the big question why this car was not NNC-worthy.

I think the beauty for Mercedes in the program is that they reduce the existing competition of young second-hand-cars, by organizing that market themselves. As a side-effect of them organizing it, it reinforces the 'value' of the new Mercedes. Finally, it builds up the maintenance-business of their official dealers.

Now, in cars, this can only work for a limited period of time, since the usage of a car and time depreciates them. With diamonds however, as long as they are not damaged, once they are re-papered by the lab, they are brand-new again. In theory, that would make such a Mercedes-like approach possible.

Live long,

 

[Karl_K]

Now, in cars, this can only work for a limited period of time, since the usage of a car and time depreciates them. With diamonds however, as long as they are not damaged, once they are re-papered by the lab, they are brand-new again. In theory, that would make such a Mercedes-like approach possible.

Live long,

Not all that different than dealers offering buyback and upgrade policies on diamonds.
It sets a min. price the consumer will look for in the secondary market.
This can and does have the effect of keeping the resale value higher when prices are stable.
This helps drive business back to the dealer.

In general the lack of a healthy secondary market for diamonds kills any possibility of a healthy investment environment growing around them.

 

[denverappraiser]

On the parallel market, young Mercedes-cars are frowned upon, because of the question-marks attached to not having a warranty, nor a check by Mercedes themselves and the big question why this car was not NNC-worthy. ,

This is interesting. So in your opinion, the NNC program depresses the market for used Benz's by people other than Mercedes dealerships selling relatively new cars? I can see how the publicists would spin the statistics on this but it sounds like it's actually having the opposite effect for the majority of customers.

 

[Paul-Antwerp]

Now, in cars, this can only work for a limited period of time, since the usage of a car and time depreciates them. With diamonds however, as long as they are not damaged, once they are re-papered by the lab, they are brand-new again. In theory, that would make such a Mercedes-like approach possible.

Live long,

Not all that different than dealers offering buyback and upgrade policies on diamonds.
It sets a min. price the consumer will look for in the secondary market.
This can and does have the effect of keeping the resale value higher when prices are stable.
This helps drive business back to the dealer.

In general the lack of a healthy secondary market for diamonds kills any possibility of a healthy investment environment growing around them.

I agree with your observation, Karl, but I need to make a distinction between buyback and upgrade. They are totally different animals.

- An upgrade-policy implies a new purchase, and most vendors have such a policy, although with slightly differing rules.
- A buyback-policy however is an unconditional guarantee, and checking most vendors active on PS, I see almost no such policies, unlimited in time.

Regardless of the reasons why such buyback-policy is not offered (they might be perfectly valid), I think that it is a perfectly valid question for any consumer to ask his vendor: "So, if I ever want or need to re-sell this diamond back to you, how much will you pay me for it?" The answers could definitely change the purchase-decision, I think.

Live long,

 

[Paul-Antwerp]

On the parallel market, young Mercedes-cars are frowned upon, because of the question-marks attached to not having a warranty, nor a check by Mercedes themselves and the big question why this car was not NNC-worthy. ,

This is interesting. So in your opinion, the NNC program depresses the market for used Benz's by people other than Mercedes dealerships selling relatively new cars? I can see how the publicists would spin the statistics on this but it sounds like it's actually having the opposite effect for the majority of customers.

A car brand in this respect is totally different from a diamond-brand. Whatever one would try to do with a Mercedes, it will remain recognisable as a Mercedes.

So, a consumer looking at a non-NNC young Mercedes obviously wonders why it did not go back to the dealership. What are the hidden faults? A young non-NNC Mercedes is in their mind a second-tier-Mercedes.

At the same time, NNC-customers are not the typical second-hand-buyer. They see a well-maintained and revised almost-new car for a cheaper price. With the accompanied warranty and the complete revision of the car, they are comparing prices to new prices, not to the second-hand-market.

When it comes down to diamonds, selling back to a retailer, the exercise becomes about how fast that retailer will succeed in selling the existing stone again. That is the traditional second-hand-approach. For a cutter however, every diamond is a potential rough diamond, and it can be adapted to what is actually selling and popular at that point in time, possibly even in a different part of the world. That is the NNC-approach, to some extent.

Live long,

 

[Karl_K]

- A buyback-policy however is an unconditional guarantee, and checking most vendors active on PS, I see almost no such policies, unlimited in time.

Almost is true, but I do see it come up on deals between PS consumers where the buyback sets the min. price.

I thought I would check some policies:

WF is one year 70% on some diamonds
I thought at one time they were lifetime???

Wink @ hpd is 80% lifetime on some diamonds

JA is 70% for 2 years on some diamonds

GOG has lifetime buyback at 75% on some diamonds

erd has 75% lifetime on some diamonds

 

[Paul-Antwerp]

Thank you for checking this and presenting the overview, Karl. I see three major differences:
- in which diamonds apply for a buyback,
- in percentages compared to sales-price,
- in time-limitations.

Given these differences, and noting that you agree that such buybacks set a minimum-level on the resale-price, isn't this a major factor in the 'investment-aspect' of a consumer's purchase?

Live long,

 

[Karl_K]

Thank you for checking this and presenting the overview, Karl. I see three major differences:
- in which diamonds apply for a buyback,
- in percentages compared to sales-price,
- in time-limitations.

Given these differences, and noting that you agree that such buybacks set a minimum-level on the resale-price, isn't this a major factor in the 'investment-aspect' of a consumer's purchase?

Live long,

To be honest Paul I am really uncomfortable using the term investment when it comes to diamonds.
Particularly when it comes to common sizes.
Should it be a consideration when purchasing? I feel that it should be a part of it, all policies should be considered.
When I compare vendors for my own personal buying I compare: Reputation and history, goods offered, services offered and all policies attached to the sale.

 

[Paul-Antwerp]

Hi Karl,

I understand that the word 'investment' in relation to diamonds often is a smelly combination. Just to clarify, I am not refering to such investment, where the idea is to make major profit on future diamond sales.

What I am talking about is the reality that in every purchase of a durable good, investment in the sense of future resale-value is a factor, although sometimes unconsciously.

If one buys a car, the second-hand-market for specific brands has an impact. If one buys a house, obviously the potential resale-value, even if one wants to live there for the rest of one's life, has an impact.

In the purchase of a diamond, if one would compare a well-cut diamond to a well-cut CZ, differences in looks and 'performance' are minimal. There must be a reason why so many consumers are willing to pay 1000-fold for the diamond. Romantics would argue that it is because of diamond being a natural product, but in the end, I think that it is because there is a perception of long-term value in diamonds.

In this, the trade is using and avoiding that aspect of the diamond-purchase at the same time. We all love to hint at long-term-value of diamonds in general, and basically depend on it. If I did not believe that a certain weight-color-clarity will have x basic value in the year from now, how could I take the risk of purchasing diamonds in order to be cut and commercialized in the weeks and months to come?

At the same time, the trade is avoiding the matter when it comes down to individual diamonds. The popularity of loose certs is a classic example, as the loose cert gives the impression of a huge underlying value (carat weight, color and clarity) for a relatively cheap price. If one does not acknowledge the investment-aspect of a diamond-purchase, one cannot truly explain to a consumer that they are getting a bad deal. Explaining that color and clarity of said lab cannot be trusted often does not convince the consumer, as the diamond still looks good to his eyes and he has a so-called grade on paper, while the 'savings' can run up to 25% or more. The key to solving this is to make the investment-aspect a conscious part of the decision, not the currently unconscious one.

Is this somewhat clear? If so, can you see this is not some side-aspect, to be catalogued under the header 'policies'. It is the heart of the matter why a certain weight-color-clarity sells for $10K.

Live long,

 

[Karl_K]

In the purchase of a diamond, if one would compare a well-cut diamond to a well-cut CZ, differences in looks and 'performance' are minimal. There must be a reason why so many consumers are willing to pay 1000-fold for the diamond. Romantics would argue that it is because of diamond being a natural product, but in the end, I think that it is because there is a perception of long-term value in diamonds.

The perception of long term value does make it easier for many people to buy them.
Still most will be bought because of tradition demanding it.
I do think the many perceptions surrounding diamonds makes people feel better when they give into tradition.
How many of those perceptions are real and how many are myths is another topic.

 

[Karl_K]

In this, the trade is using and avoiding that aspect of the diamond-purchase at the same time. We all love to hint at long-term-value of diamonds in general, and basically depend on it. If I did not believe that a certain weight-color-clarity will have x basic value in the year from now, how could I take the risk of purchasing diamonds in order to be cut and commercialized in the weeks and months to come?

Yourself and stocking dealers are both betting they will hold value. Historically that has been a safe bet with a few exceptions but it is still a bet.
The entire industry is based on a stable and mature market for the finished products.
Which is why the downturn of 2008 put many out of business.
They did not have the capital to survive, mainly because they have not had to have it the way the industry was structured.

 

[Karl_K]

At the same time, the trade is avoiding the matter when it comes down to individual diamonds. The popularity of loose certs is a classic example, as the loose cert gives the impression of a huge underlying value (carat weight, color and clarity) for a relatively cheap price. If one does not acknowledge the investment-aspect of a diamond-purchase, one cannot truly explain to a consumer that they are getting a bad deal. Explaining that color and clarity of said lab cannot be trusted often does not convince the consumer, as the diamond still looks good to his eyes and he has a so-called grade on paper, while the 'savings' can run up to 25% or more. The key to solving this is to make the investment-aspect a conscious part of the decision, not the currently unconscious one.

There is a lot of truth to that.
I think the argument that you know what you are actually getting with a much better degree of certainty with first level grading reports than with second and third level reports is the best argument against soft certs.
Resale value certainly is a part of that.