I was a little surprised to hear DTC managing director Varda Shine tout diamonds as a “hard asset,” and by implication an investment option, in this interview with Bloomberg (video.)
And apparently, that wasn’t just a one-off. In a letter to sightholders sent out today, she amplified this message:
There is an almost universal belief, with strong cultural resonances everywhere, that diamonds are solid; that they have enduring value. In fact, it is on this very passionately held belief that we are basing a comprehensive new programme of communication (advertising and PR) to consumers, particularly in North America. Over the coming weeks and months leading up to the all-important season, you will see more and more communication from us – and we have no doubt this will be amplified by you – on this theme.
We know that in tough times, consumers gravitate towards quality; that they buy fewer, but better things – things that last, which are not disposable and which hold their value.
Clearly, it’s not a coincidence that the “diamonds hold their value” theme keeps coming up. And it certainly makes sense as a marketing tactic to boost diamond sales – though I am not sure it does as an investment strategy. (We’ll save that discussion for another day.) People are looking for something solid in these uncertain times. And while this isn’t the first time that diamonds have been promoted as an investment vehicle, it is pretty surprising to hear it being done (somewhat) by De Beers itself.
Now, commodity prices haven’t exactly been soaring lately; this may have been a better tack six months ago. But still, the diamond market needs something to give it a boost. Could this be it?Follow JCK on Instagram: @jckmagazine
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