Find your diamond
Find your jewelry
shape
carat
color
clarity

Stock market affect diamond purchases?

WillyDiamond

Brilliant_Rock
Premium
Joined
Dec 7, 2004
Messages
1,273
I have to think that "luxury" goods like diamonds, automobiles, home buying have to be affected by this stock market. It would seem many but not all would have the money for these purchases sitting in the market. If I had money in the market now, I would not want to withdraw it now because this will erode my balance much further than prices from 12/31/15. People I speak to are waiting for the market to go back up again, this may take time and anyone's guess.

I am wondering if anyone is delaying the reset, outright purchase of a diamond, due to the stock market? Or now looking at a smaller diamond. Also have to wonder if this will put some diamond dealers out of business.
 

diamondseeker2006

Super_Ideal_Rock
Premium
Joined
Jan 11, 2006
Messages
55,631
Diamond prices are low right now and it is an excellent time to buy! I have heard that the jewelry market is slow, too, though.
 

ringo865

Ideal_Rock
Premium
Joined
Feb 14, 2014
Messages
2,369
I haven't ever liquidated stocks or other market funds to buy diamonds. I consider them to be discretionary purchases and thus would use savings or save up for something I wanted. That said, I haven't spent five figures on a diamond (to date ;))). If I did though, I think I'd have cash on hand. Otherwise, by liquidating my portfolio or retirement, I would feel like I couldn't really afford it. Then I'd feel guilty. knim?
 

John Pollard

Ideal_Rock
Trade
Joined
May 1, 2008
Messages
3,559
Fun topic. I hope others will weigh in.

For context: Diamond prices historically rise over time. I am sure long-time posters here will remember the dramatic increases circa 2010-2011 (+20% in 2011 alone). These increases happened in response to mid-term supply-demand projections juxtaposed with explosive growth in emerging Asia-Pacific markets. But after 2011 the global recession, slowing of Chinese demand, the terribly-beleaguered Rupee and standoffs between rough sellers and buyers made it clear that some of that inflation was overly speculative. To that end, diamond prices actually softened over the last two years. This was a logical adjustment, looking at the big picture.

diamondseeker2006 said:
Diamond prices are low right now and it is an excellent time to buy! I have heard that the jewelry market is slow, too, though.
True on both counts. Where key trade shows in the USA and Asia were slow for several years, reflecting the need for an adjustment, the mood seems to have changed. In particular, a strong Hong Kong show last September correctly portended a positive 4Q, and growing optimism among many jewelers.

As for stock market dynamics: No doubt this has an influence on luxury spenders in terms of conspicuous consumption and budget... If you're someone who was considering that 5ct E VVS1 emerald in the window of Harry Winston last month, but your portfolio is taking a bath, you may decide to scale back the purchase or wait entirely for some kind of rebound. With that said, I don't know how much market ups and downs resonate with current e-ring shoppers who don't play the market, or those with a portfolio who already have a budget, a process and a proposal schedule in mind.

Along the lines of the original question: Neil Beaty points out that Anglo American (DeBeers') stock is plunging into oblivion. No doubt there are some interesting fallout scenarios possible there.
https://www.pricescope.com/community/threads/are-we-seeing-the-end-of-debeers.218083/
 

diamondseeker2006

Super_Ideal_Rock
Premium
Joined
Jan 11, 2006
Messages
55,631
But as very wise men here have said before....there is risk in trying to wait for the bottom, because no one knows whether we are at the bottom now or if prices might decline a little more.
 

FancyDiamond

Brilliant_Rock
Premium
Joined
Jun 16, 2009
Messages
1,035
I buy luxury items with spare money which I do not count on to live or pay bills. However, given the current market correction (and expect further drop to go), I would hold all luxury purchases and use the spare money to accumulate stock mutual funds/quality stocks and pay taxes for additional Roth conversion (since fund shares are now worth less). The former is for investment opportunity of "buy-low", and the latter is to reduce deferred retirement account balance (so as to minimize tax bracket when Required Minimum Distribution kicks in).

Diamond prices may remain low for a much longer time than a stock market recovery. Furthermore, I do not think there will be as much competition from Chinese buyers as before. Thus, I would take my time sitting on the sideline enjoying other people's reveal threads. If the Diamond prices turn out to be much higher when I am ready to buy again, then so be it. Hopefully, my pockets would be loaded with so much capital gains and tax savings that I would be able to make larger and more significant Diamond purchases.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
8,187
There's a totally different perspective I became aware of in 2008.
When stock prices are falling, some people realize that if they'd invested in something they would love, as opposed to the stock, they'd still have it.
IOW, if I had purchased that 1961 Les Paul guitar in 2014 for $30k instead of the Debeers stock I could still at least play a sad song- even if my guitar was now worth $20k

Many consumers expressed this sentiment to me regarding diamonds in 2008.
Might as well enjoy it while you can.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
8,187
diamondseeker2006|1453236564|3978096 said:
But as very wise men here have said before....there is risk in trying to wait for the bottom, because no one knows whether we are at the bottom now or if prices might decline a little more.
True dat DS!!

Right now it's very difficult to find the most desirable stones. And prices on such stones are strong.
DeBeer's stock price seems to have little to with polished diamond prices
 

ChristineRose

Brilliant_Rock
Premium
Joined
Aug 5, 2012
Messages
926
There's a fair number of people who buy precious stones during a crash because they think fiat currencies will collapse. Many more buy gold of course. I think that if fiat currencies do collapse, we'll all trade in something besides shineys. Cigarettes are the classic example, having been the economy of a good hunk of Europe for the entire 20th century. But others as diverse as Tide (yes, that Tide), beef jerky, and baby formula have been used.
 

ADN

Shiny_Rock
Trade
Joined
Nov 24, 2015
Messages
311
Great thread! :appl:
I'll add another perspective which I'm sure some of the other trade members can comment on...
If anyone in the trade has been overseas on a buying trip lately, as you know, it's pretty slim pickings...a lot of the sight holders have rejected the last few assortments of rough because of high prices. This means that there isn't a lot of new polished inventory hitting the market, and what there is in existing goods isn't always that flash (if anyone has been sorting through 5/4s in H+SIs you'll know what I'm talking about :o )
So while prices might be a bit soft in some sizes/qualities, make sure that the quality you're getting isn't a bit 'soft' as well.
 

Dancing Fire

Super_Ideal_Rock
Premium
Joined
Apr 3, 2004
Messages
31,588
John Pollard|1453234949|3978085 said:
Fun topic. I hope others will weigh in.

For context: Diamond prices historically rise over time. I am sure long-time posters here will remember the dramatic increases circa 2010-2011 (+20% in 2011 alone). These increases happened in response to mid-term supply-demand projections juxtaposed with explosive growth in emerging Asia-Pacific markets. But after 2011 the global recession, slowing of Chinese demand, the terribly-beleaguered Rupee and standoffs between rough sellers and buyers made it clear that some of that inflation was overly speculative. To that end, diamond prices actually softened over the last two years. This was a logical adjustment, looking at the big picture.
JP
10 month ago you were laughing at me when I said...

For the past 2 yrs the Chinese government are cracking down on the use of corrupted money, it is all over the Chinese newspapers. These corrupted officials were buying luxury goods like there was no tomorrow..i.e. expensive Cognac, watches, cars. Yes, the population in China is HUGE but the avg. citizen is still poor and can't afford to purchase expensive diamonds. Most of the so called "rich people" in China are corrupted officials who are hiding under their beds now. Even my favorite bottle of booze have dropped 25% in price.
 

laurenk

Brilliant_Rock
Joined
Nov 12, 2011
Messages
953
I feel the awful stock market has made me nervous about my impending purchase of a loose diamond in the USA because I'm Australian and the dollar is sh*t and it currently means the diamond is going to cost me a LOT more than I planned for!! I am praying for a vast improvement soon!!!
 

ADN

Shiny_Rock
Trade
Joined
Nov 24, 2015
Messages
311
laurenk|1453289125|3978448 said:
I feel the awful stock market has made me nervous about my impending purchase of a loose diamond in the USA because I'm Australian and the dollar is sh*t and it currently means the diamond is going to cost me a LOT more than I planned for!! I am praying for a vast improvement soon!!!
I feel your pain...remember only a few short years ago when we at 1.05 to their 1...good times... :dance: ...that's not gonna happen again anytime soon... :(
 
Be a part of the community It's free, join today!
    5 Diamond Misconceptions: Part 1
    5 Diamond Misconceptions: Part 1
    Three-stone engagement ring upgrade
    Three-stone engagement ring upgrade
    Vintage OEC Bracelet
    Vintage OEC Bracelet

Need Something Special?

Get a quote from multiple trusted and vetted jewelers.

Holloway Cut Advisor



Diamond Eye Candy

Click to view full-size image.
Top