Diamonds are forever not just their durability but the time it takes for them to turn a profit for investors.
For that reason, gem experts say, diamond jewelry should be bought for sentimental reasons and because of its track record of long-term appreciation.People are apparently doing just that. Jewelers report a surge in diamond sales in the past year.
Diamond jewelry sales reached $11.3 billion last year, up 16 percent from $9.7 billion in 1986 and 28 percent more than 1985's $8.8 billion, according to an annual survey by the Diamond Information Center, a division of N.W. Ayer Inc. of New York.
N.W. Ayer is the U.S. marketing arm of De Beers Consolidated Mines Ltd., the South African cartel that controls nearly 80 percent of the world diamond market.
Sales in New York, the top U.S. diamond market, rose 18 percent last year.
De Beers, through its London-based Central Selling Organization, announced last month that it is raising the price for rough diamonds by 13.5 percent - the third increase in the last 18 months.
Since late 1986, rough diamond prices have jumped a total of 30.5 percent.
While jewelers give various reasons for the growing interest in the precious gem, some don't even attempt to question it.
"We've learned not to judge a book by its cover. We sell to people wearing jogging suits to ones wearing furs," said Dencie Brooke, sales manager at Tiffany & Co. in San Francisco.
"We really can't tell . . . why they're buying," she said. "We don't ask. We're just glad to sell."
But Mobell said one could just look to the problems on Wall Street to explain why investors are putting their money in something more tangible.
"To have something tied up in municipal bonds or CDs, they're not really enjoying it," he said. "With a diamond, it's not just appreciating (n value) but there's the fun of having it and wearing it and enjoying it."
Some jewelers, however, said diamonds may not be a brilliant choice for people seeking new investment alternatives to the stock market.
"You're not going to invest in one or two diamonds and make any money," said Don Ross, owner of Ross Jewelers in South San Francisco.
William Underwood, an Arkansas jeweler and president of the American Gem Society, said investors have to hold a diamond for at least five years to make a good profit.
For example, Underwood said, the value of an average quality one-carat diamond - between $3,000 and $5,000 - has only increased about 15 percent in the last six years.
However, the proverbial flawless "D" one-carat diamond - considered the most rare and perfect diamond - has jumped 62 percent during the same period, to about $24,400.
Most jewelers are careful in describing a diamond as an investment.