Highlights
- What are lab grown diamonds?
- The financial advantage of lab-grown diamonds
- Appreciating value of lab-grown diamonds
- Will lab-grown diamonds hold value?
- Who buys lab-grown lab-grown diamonds?
- Making a smart investment choice
- Conclusion
Investing in diamonds has always been a symbol of enduring elegance where the radiance of this timeless gem reflects the socio-cultural status of its owner. While natural diamonds have traditionally been the go-to choice for investors, the emergence of lab grown diamonds presents a compelling alternative for reasons like growing inventories dedicated to producing high-quality LGDs and the rise in retailers and handsome profits in this industry.
This comprehensive guide will help you understand the key aspects such as cost savings, value appreciation, and market trends in the lab-grown diamond industry highlighting its glaring contrast to investments in natural diamonds.
Understanding the Basics
What are Lab Grown Diamonds?
Lab-grown diamonds, also known as synthetic or cultured diamonds, are created in controlled environments using advanced technological processes. These diamonds are chemically, physically, and optically identical to natural diamonds, offering the same brilliance and durability. While natural diamonds are formed over billions of years, lab grown diamonds require a few weeks to be prepared and thus prove to be a rather ethical and substantial alternative to their earthly counterpart.
While there are two primary kinds of lab-grown diamonds, we, here in Stella Fine Jewellery, specialise in crafting shimmering jewelleries made of exquisite lab-grown CVD diamonds. To know more about lab-grown diamonds, you can check this article.
The Financial Advantage of Lab Grown Diamonds
Significant Cost Savings
One of the most compelling reasons to invest in lab grown diamonds is the significant cost savings they offer. Lab grown diamonds typically cost 40-80% less than natural diamonds of comparable size and quality. This cost efficiency allows investors to acquire high-quality diamonds without breaking the bank.
For example, let’s say you have a budget of ₹8,00,000 which could buy you a natural diamond weighing around 1.5 carats. However, a 1.5 carats lab grown diamond will cost you ₹2,00,000, allowing you to enjoy a larger, more stunning gem all the while saving you money. Thus, if you opt for a lab grown diamond instead, costing around ₹2,00,000, you save ₹6,00,000 upfront.
Investment Diversification
This cost savings, realised from purchasing lab grown diamonds, can be strategically invested in various other assets, such as stocks, bonds, real estate or mutual funds, generating much higher returns over time. This diversification spreads risk across different investment classes, which is a cornerstone of sound financial planning. For instance, when you save ₹6,00,000 by purchasing lab grown diamonds from reputed brands like Stella Fine Jewellery, you can invest that amount in a high-yield stock, potentially increasing your total investment returns. Thus, the resale value of lab-grown diamonds allows you to build a more robust financial portfolio which was not possible earlier.
Appreciating Value of Lab Grown Diamonds
Market Acceptance and Demand
The demand for lab grown diamonds is on a steady rise, driven by increasing awareness and acceptance among consumers. Millennials and Gen Z, in particular, are leading this shift. These generations are known for their preference for aesthetically pleasing, sustainable and ethically sourced products. As lab grown diamond jewelleries, prepared by brands like Stella Fine Jewellery, perfectly align with these values, their popularity is expected to grow, driving up their market value.
Online searches for ‘Lab Grown Diamonds’ have also significantly increased over the past few years. As this article by Grown Diamond Corporation records, online searches for LGDs have tripled in the last decade.
Technological Advancements
Technological advancements in diamond synthesis are continuously improving the quality and variety of lab grown diamonds, ensuring the 4Cs are well-maintained. As these technologies evolve, the market for lab grown diamonds is expected to expand, further enhancing their value. The superior quality of lab grown diamonds available today is a testament to the potential for future appreciation.
You can check this article on how lab grown diamonds are made and prepared using advanced technologies.
Will Lab Grown Diamonds Hold Their Value?
Ethical and Environmental Appeal
Unlike natural diamonds, which can be associated with unethical mining practices and significant environmental damage, lab grown diamonds are produced in a sustainable manner. This ethical and eco-friendly quality of lab-grown diamonds, which thus differentiates them from natural diamonds, is increasingly important to modern millennial and Gen-Z consumers. Consequently, it adds to the investment appeal, enhancing their long-term value proposition.
Ethical and Environmental Appeal
Due to their investment appeal, there are promising signs of growth in the resale market for lab grown diamonds. More jewellers and online platforms are beginning to offer trade-in and buyback programs for lab grown diamonds as they are valuable assets at lesser price, open up more investment policies, and are priced proportionately, as per this article on lab-grown in Financial Express.
According to a report by Bain & Company, the global market for LGDs is expected to reach 14.9 Billion in 2030 growing by a rate of 15% to 20% annually. Thus when the market value increases, the resale value is also strengthened, ensuring that lab grown diamonds hold their value over time.
Who Buys Lab Grown Diamonds?
Socially Conscious Investors
One of the largest diamond mines - Argyle Mine in Australia, was shut down in 2020, once again highlighting the ethical substantiality of lab-grown diamonds in comparison to natural diamonds. This very quality attracts a significant segment of socially conscious investors who prioritise ethical considerations and environmental sustainability in their investment choices. Naturally, they align their financial decisions with their values by making a choice in investing in lab grown diamonds, contributing to a positive social impact while also enjoying the benefits of a tangible asset.
Millennials and Gen Z
Millennials and Gen Z are driving the demand for lab grown diamonds. This demographic is characterised by their preference for products that are not only high quality but also aesthetically pleasing as well as ethically and environmentally responsible. A report by MVI Marketing LLC has noticed a significant leap from 9% (2010) of consumers to 51% (2018) - a number which is still on the rise. As they enter their prime earning and spending years, their preference for lab grown diamonds will likely lead to increased demand and value appreciation.
Making a Smart Investment Choice
Comparing Natural Diamonds and Lab Grown Diamonds
When comparing natural diamonds and lab grown diamonds from an investment perspective, several factors come into play. Natural diamonds have a long history of value appreciation and a well-established resale market. However, the high cost and ethical concerns associated with natural diamonds can be significant drawbacks.
Lab grown diamonds, on the other hand, offer substantial cost savings, ethical benefits, and the potential for market growth. While the resale market is still developing, the increasing acceptance and demand for lab grown diamonds are promising indicators of future value retention and appreciation.
Strategic Investment Planning
Investing in lab grown diamonds can be a strategic component of a diversified investment portfolio. The cost savings allow for additional investments in other asset classes enhancing potential returns. Furthermore, the ethical and environmental appeal of lab grown diamonds can attract socially conscious buyers, supporting long-term demand and value appreciation. However, one should do a proper research on recent market circumstances and a quality check before purchasing or investing in lab-grown diamonds.
Conclusion: Lab Grown Diamonds as a Wise Investment
In conclusion, lab grown diamonds present a compelling investment opportunity. They offer significant cost savings, allowing for diversified investment strategies and enhanced potential returns. The growing market acceptance and demand, driven by ethical and environmental considerations, suggest that lab grown diamonds, as marketed by popular brands like Stella Fine Jewellery, will hold and potentially appreciate in value over time.
Lab grown diamonds’ alignment with modern values, coupled with their financial advantages, makes them a smart choice for investors looking to add a touch of brilliance to their portfolio. Whether you are a socially conscious investor, a Millennial, or Gen Z consumer, or simply someone looking to make a wise financial decision, lab grown diamonds offer a promising path for your investment journey.
Embrace the future of diamond investment with lab grown diamonds – a choice that shines with both financial and ethical brilliance.
