Ditch the ring, you should have bought Tiffany stock

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.
Tiffany Stock

NEW YORK  — Anyone who tells you diamonds are a girl’s best friend needs better financial advice.

Sure, those precious stones found in many engagement rings, necklaces and royal crowns are pricey and coveted. But a good investor would want to know whether they go up in value over time. Is it lovely for the ring finger — and the pocket book?

A high quality, one-carat diamond went for around $6,000 in 1987. It would be worth nearly $13,000 today, according to the Rapaport Diamond Index.

That sounds good … until you consider what you would have made if you had bought Tiffany & Co. stock in 1987 instead of a diamond ring.

Tiffany has been all that glitters and then some. Shares of the famous jewelry company traded for under $2 on the New York Stock Exchange when they debuted in May 1987.

The stock now trades for $100.

So if someone had taken the $6,000 it would have cost to buy a diamond for an engagement ring in 1987 and invested it in Tiffany stock instead, the lucky recipient of those shares would have more than $312,000 in his or her bank account today.

Yes, you read that right.

Investing in Tiffany’s stock at any point over the past two and a half decades would have been far better than buying an actual piece of diamond jewelry from the store.

While there is a lot of variation in diamond prices depending upon the quality and size, even a 3-carat diamond hasn’t gone up in value nearly as much as Tiffany shares.

There might not be as much “bling” factor in owning stock, but there’s certainly more “ka-ching.”

Even if you had waited until 2010 to buy the stock or the diamond, you would still have been smarter to buy Tiffany shares.

A good quality 1-carat diamond cost around $11,000 in 2010, according to Rapaport. Today, that diamond would be worth almost $13,000. A decent return, but not stellar.

Had you taken $11,000 and bought Tiffany shares, you would be sitting on more than $23,000 today — enough to buy your special someone a piece of jewelry and still have enough for a nice honeymoon.