The chart below shows the change in the yen and dollar wholesale prices of medium-quality, one-carat-sized diamonds, in increments of approximately twenty years, from 1900 through 2000. The prices for 1900 and 1920 were taken from Houseki Hyaku-nen (One-Hundred Years of Gemstones)(Wakaba Kurabu, 1966). In those days, Japan was still months away from Europe by ship. The dollar prices shown were calculated from the yen prices, and may differ from Western estimates. When using the chart, it is also important to remember that diamond production during the early 20th century was 1/60 of the current amount, and that the cut of diamonds was quite different from the modern brilliant.

Comparing the numbers for 1900 and 2000, yen prices increased 5,000 times, from ¥100 to ¥500,000, while dollar prices increased 100 times, from $50 to $5,000. This is not because of a change in the value of diamonds, but instead should be thought of as a drop in the value of currency due to inflation. As a result of the prosperity following World War I, we see a sudden increase in 1920 prices. Rampant inflation in Japan following World War II caused a hundred-fold rise in yen prices between 1944 and 1948. The sudden rise seen in the 1980 figure was a temporary phenomenon caused by speculative demand in the United States. At the time, there was an amazing rise and fall in the prices of high-grade, one-carat-plus diamonds. This chart illustrates how gemstones, if bought during normal periods, can be worn and enjoyed, and will remain an asset.

Expenses related to jewelry sales are a fact of life, whether for a store, catalog, television shopping network, or even an Internet-based company. If, for example, sales promotions such as invitations to dinner shows or overseas travel are used to sell jewelry, the cost is added to the jewelry. The dotted line going from A to B in the diagram shows the relationship of costs that make up the retail price, ranging from products with relatively high product value and low sales costs on the left (A), to the right, where sales costs are relatively high in relation to the product value (B). Which is chosen is up to the customer.

In the United States, it is common for consumers to insure newly-purchased jewelry for the retail price. An appraiser assesses the jewelry based on replacement value, rather than product value, to arrive at an amount that is close to the retail price.

One must avoid purchasing jewelry that is unfairly expensive, but disregarding the labor, storefront, and marketing costs associated with selling jewelry while trying to obtain the best value for yourself is not a commendable attitude. After all, it is safe to assume that stores emphasizing low prices when selling jewelry are not cutting back on their cost of sales or profits, but are simply carrying merchandise that is that much lower in quality. As seen in the “Changes In Diamond Prices” chart on previous page, one hundred years of history suggest a ling-term rise in prices. The smart way to buy jewelry is not to buy a low-priced, trendy piece, but to find a quality piece that you like and that you think will be appreciated when it is passed on, and to boldly purchase it when you have the available funds-even if you think it is a bit expensive.

Developing an eye for judging the quality of jewelry requires looking at as many prices of fine jewelry as you can and, if possible, purchasing fine jewelry and wearing it. If you purchase and wear one or two pieces of jewelry of the type that appear n Chapter 1, your judgment skills will surely improve, and as you compare other jewelry to the jewelry that you own, you will become a better judge of the finer points of jewelry quality.

Chapter 2 explores the three factors that contribute to the quality of jewelry- conception, materials, and fabrication- and continues with discussions on the condition of jewelry, remodeling, recirculation and redistribution of jewelry, and trend and tradition.