Are Diamonds forever? The answer maybe no sooner than you think!
Twenty years ago 73% of over 50s owned £5,000 or more in value of very very high quality beautiful fascinating jewels and precious metals like gold and silver and gems like rubies, diamonds, pearls, emeralds and so much more, a time indeed of beauty and refinement and luxuriousness expressed with these wonderful items of jewelry, and this accumulation formed part of what the Wealth and Assets Survey 2016 (WAS) shows was part of the biggest “physical wealth” of retirement age persons who had amassed £66,900 or more in physically owned items in their properties or safe storage in safety deposit boxes. This to todays Millennials seems like an impossible dream. Just twenty years has passed.
However, as the 16-24 year old age bracket have less physical wealth than those of retirement age it can very well be argued that this is a function of the growth of personal physical holdings over time and that once the 16-24 year old age bracket reach retirement that they would emulate their predecessors and have amassed similar amounts of physical possessions. The facts however, tell us something different and this is based on the data, on the logical deduction from the data. The data is telling us that in Britain, the age at which Millennials are buying their 1st property is 30 plus years of age, but in 1960 the average age of first property purchase was 23 plus years of age, this represents a 7 year gap. The reasons according to experts is that the 16-24 year old bracket are not amassing physical wealth [precisely because they do not own their own homes until later this is according to industry analysts. Sarah Berger from the website TheCashlorette.com asserts that todays young generations those 16-24 years olds and slightly younger and slightly older are far more interested in experiences than physical possessions and that is why they are not accumulating physical assets. this means that they would rather go on holidays than own exquisite pieces of jewelry that grow in value and provide beauty within their lives for a lifetime.
It has come to light that this transference of desires from physical accumulation of items that remain valuable forever to spending substantial sums of money on sensory experiences such as travel experiences to exotic destinations or trips to classical music events or tours of destinations with amazing architecture which allow the formulation of memories that stay with people their whole lives is actually now a great desire also of those aged between 64-75 years of age, this is made statistically clear by research conducted by the Office for National Statistics the (ONS) which shows that 64-75 years olds are spending a fifth of their wealth in this manner.
It is also clear however that the cost of living is rising and that just surviving is taking more and more of peoples earnings, and the loser out in this is the seller of physical items, people are making their choices as they have less disposable assets in the form of income to spend after paying their living expenses, which are rising.
Perhaps the most telling symptom shall we say of this is the startling fact that according to the Diamond industry, the Diamond Industry has slowed down, that those same Millennials who are buying houses later and valuing paid for experiences higher that physical assets are not buying as many diamonds or jewels or jewelry as their predecessors at their age did. According to analyst Des Kilalea (RBD Capital Market) “Diamond jewelry appears to be low on the buying lists” of those same Millennials. Its just not that important to them. Of course this is worry-some to say the least for those industries affected because it is also suggested that this most active generation of Millennials may perhaps be heralding and increasing decline in diamond purchases (which account for half of all jewelry sales according to Insure4Retirement who have their largest market in Baby-boomers) Unless the jewel sellers act to reverse the trend then what will stop it is the worry for those industries and will it increase! Interesting times indeed! Could it be that Diamonds are not forever?
Please note these observations are those of our author and editor and we would encourage everyone to conduct their own research and to prodigiously research all information and use data to determine the facts and to consider other sources of information before forming rock solid opinions!
Very, very best wishes!
Editor, the Markets, InTouch Rugby.