Why You Should Buy a Lab Diamond Engagement Ring

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Diamonds are a luxury.

The main argument I hear against lab diamonds is that they "are not a good investment". The truth is that diamonds, regardless of their origin, are not good investments, period. And that's okay. Many wonderful things are not good financial investments: pets, new cars, vacations, shoes. An engagement ring is a luxury item, and it should be treated as a luxury purchase not an investment vehicle. By contract, the Vanguard S&P 500 ETF (VOO) is an excellent investment, but you can't wear it on your finger as a symbol of love and commitment.

These articles by Smart Asset and Beyond 4 C's discuss the poor resale value of diamonds, and the many reasons why a diamond engagement ring should not be considered an "investment". This is why a lab diamond is a more prudent luxury purchase than a mined diamond.

Lab diamonds are diamonds.

Lab diamonds and mined diamonds are both diamonds. The FTC recently ruled as follows: “The Commission no longer defines a ‘diamond’ by using the term ‘natural’ because it is no longer accurate to define diamonds as ‘natural’ when it is now possible to create products that have essentially the same optical, physical, and chemical properties as mined diamonds.” Let me repeat that: lab diamonds and mined diamonds have essentially the same optical, physical, and chemical properties. As Forbes very elegantly stated last year, "a diamond is a diamond no matter whether it is grown in a lab or comes out of the ground."

According to the GIA, in some cases a trained gemologist can recognize a lab diamond by using standard gem-testing equipment. In other instances, positive identification must involve testing the diamond using advanced scientific instruments at GIA (emphasis added). You will be not be able to tell the difference between a lab diamond and a mined diamond, and neither will your friends and family.

Consider the case of cultured pearls. I have a gorgeous strand of cultured pearls from Tiffany's worth hundreds of dollars. I would laugh at anyone who said they aren’t "real" pearls because they didn't come from a wild oyster. And I certainly wouldn't have much trouble reselling my Tiffany pearls on eBay.

Reselling lab or mined diamonds.

Lab diamonds cost about thirty percent less than mined diamonds for stones of similar quality. The top retailers include James Allen and Brilliant Earth (Lark ring pictured). As long as you purchase a lab diamond that comes with an IGI Report (or similar certification) with a laser inscription, you can resell it the same way you would a mined diamond.

Here's the salient point: Because of the time value of money, you should spend as little as possible to acquire the ring of your dreams. This will allow you to place the balance of your budget (a 30% savings) into an investment that will actually make money over time, such as VOO, SWPPX, VIG, or SCHD.

GGZ Editor

With a passion for fine jewelry and 15 years of traditional and online editorial experience, the Girls Guide to Glitz Editor searches the four corners of the web (and the four corners of the Girls Guide jewelry box) to bring you articles, reviews, and information explaining the features and benefits of a wide variety of fine jewelry.