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Invest Now in Millennials’ $80 Billion Diamond Disruption

Invest Now in Millennials’ $80 Billion Diamond Disruption

Story Highlights:

  • Lab-grown diamonds are checking all the right boxes for millennials.
  • With up to 61% of millennials projected to marry by 2024, the lab-grown diamond market has the fuel to grow further.
  • Here’s the best way to grab profits on the way up with new-world diamonds.

Can you tell which of these diamond engagement rings is grown in a laboratory versus naturally mined?

Ring A or ring B?

Hint: Both engagement rings have a 2-carat diamond solitaire with 14-karat white gold bands.

The mined diamond ring costs $18,000, and the lab-grown diamond ring costs $13,000. So with a difference of $5,000, the lab-grown diamond costs 28% less.

lab grown diamonds

 

traditional diamonds

The answer: Ring A is the lab-grown diamond ring and can be yours for $12,999.

This new-world diamond evolution is striking a chord with millennials. And as you know, watching what this generation likes is a great way to spot the new-world investments that lead to big returns.

This disruption has the potential to turn the $80 billion diamond industry on its head.

Get in on the Diamond Disruption Before It Hits Full Force

Last month, one of my dear friends got engaged.

Her fiancé popped the question on a whim, so he didn’t have a ring.

Instead, in true millennial fashion, he told her she can pick out whatever ring she wants, no expense spared. Nice!

For the last couple of weeks, she’s been on a quest to find the perfect ring.

So far, her search has led her to the lab-grown diamond market.

Being an economical person by nature, buying a lab-grown diamond engagement ring appears to be a perfect fit for her.

This is more proof of the huge disruption that I’m seeing in the diamond market led by millennials like my friend.

Not to be confused with diamond simulants such as cubic zirconia, lab-grown diamonds are the real deal.

They are physically and chemically identical to naturally mined diamonds.

According to MyGemologist.com: “The differences between a natural and a lab grown diamond stem from how they were made. Lab grown diamonds are man-made in a lab while natural diamonds are created in the earth.”

Much like plants, these lab-grown diamonds start from a seed and grow.

They can be created using two techniques: the high-pressure, high-temperature (HPHT) method and the chemical vapor deposition (CVD) method.

The HPHT technique begins with a diamond seed.

Diamond seeds come from naturally mined diamonds.

Like diamonds grown in nature, diamond seeds for lab-grown diamonds are placed under extraordinary conditions to help them grow, but in record time.

Diamond seedlings can become full-sized diamonds in 10 weeks to 12 weeks, versus the 1 billion to 3.3 billion years it takes for natural diamonds to form.

The HPHT laboratory process uses extremely high temperatures and enormous pressure from steel machines like the one below to create diamonds.

HPHT cubic press for making lab grown diamonds

MyGemologist.com describes the CVD technique this way: “In the CVD process, a chamber is filled with a carbon rich vapor. Carbon atoms are extracted from the rest of the gas and deposited on a wafer of diamond crystal which establishes the crystal structure as the gemstone grows layer by layer.”

How to Invest in This $80 Billion New-World Diamond Trend

Lab-grown diamonds are on the cusp of completely disputing the $80 billion diamond industry.

Millennials, like my newly engaged friend, are the demographic set to place this disruption in motion.

Lab-grown diamonds are checking all the right boxes for this generation and younger:

  • More affordable (30% to 50% less expensive than naturally mined diamonds).
  • Socially responsible.
  • Environmentally conscious.
  • Conflict-free.

Transparency Market Research projects the global lab-grown diamond market will grow significantly, reaching $29.2 billion in 2025 from $18.2 billion in 2018. That’s a compound annual growth rate of 7% and an overall gain of 60%.

lab grown diamond market size

With up to 61% of millennials projected to marry by 2024 according to a study by The Black Tux, the lab-grown diamond market has the fuel to grow further.

percentage of millennials predicted to be married by 2025 by state

So as this market builds, there’s a great way for you to profit on the way up.

While several lab-grown diamond jewelry companies are privately held, the Vanguard Consumer Discretionary Index Fund ETF Shares (NYSE: VCR) contains retail companies that sell lab-grown diamonds directly to consumers.

This exchange-traded fund (ETF) is up nearly 23% year to date.

In all, lab-grown diamonds are the future of the jewelry market.

Until next time,

Amber Lancaster
Director of Investment Research, Banyan Hill Publishing

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