The engagement ring: investment vehicle or symbol of commitment?


Love is in the air, and there’s no better time than to think of one of the strongest symbols, if any, of the Valentine’s Day season. Sure, there’s the chubby Cupid with his bow and arrow, and yes, there are the boxes of chocolates and candies, and more red and pink hearts than you can bear. But, if you think about it, there’s no better indicator of your valentine’s commitment to including you in his future than the engagement ring when he’s on his knees, while offering that little box he asks : ” Will you marry me ?

In fact, the modern engagement has become so big that it’s now a prime-time event, often featured on couples’ wedding websites, and includes photo shoots, dinner parties, and photo required of the bride-to-be, tears gently bathing her cheeks as she wiggles her ring finger and shares the good news digitally with her friends, family and even the world, for which she has finally been spoken.

For many would-be brides, however, the engagement ring is the start of a spending season, a spending carnival, really, that will culminate in a wedding they’re not sure they can afford. And there are those single women who console themselves that marriage is an old-fashioned, patriarchal construction that should have been abandoned a long time ago.

Is marriage obsolete?

Results from a 2020 Gallup Values ​​and Beliefs poll indicate that while the numbers of married American adults are falling, the vast majority of adults who have never been married (one in eight) remain interested in getting married a day. Having children together, they say, is no longer a reason to marry; in fact, 66% believe it is “morally acceptable” to have a child out of wedlock. However, according to them, the essential reason for the marriage was that the couples planned to spend their lives together.

But, with the earliest recorded evidence of a marriage ceremony circa 2350 BC. AD, in the Far East, it is probably safe to say that the tradition of marriage is not quite extinct; it’s just evolving.

The engagement ring

This week, in our February series “Investing in Love,” let’s see why this little group meant to signify unbroken love is sometimes such a polarizing symbol.

The engagement ring is usually expensive; If you’ve ever seen a De Beers ad, you’ll know it should cost around three months’ salary. The fiancée or his friends will criticize him if he does not have a sufficiently large and sparkling impressive rock. In fact, many brides-to-be have been tempted to have it discreetly appraised to see if she’s wearing an investment piece right on her finger.

Can the engagement ring be an object of investment?

The answer may not be so clear cut, pardon the pun. First of all, it must be remembered that an investment, in the truest sense of the term, is an asset acquired for the primary purpose of generating income by the appreciation of its value over time. So you’re buying stock, and the value of the stock is expected to increase over time, all other things being equal.

But that’s usually not the thought process when buying an engagement ring. Engagement and wedding rings have traditionally been sentimental symbols of the couple’s undying love and therefore to regard them as long-term investment pieces could be seen as cynical, indicating that there is no no faith that love will last forever.

But is this cynicism or pragmatism, given the state (and, often, fate) of modern marriages?

The fact is that savvy investors today invest in an assortment of high-quality diamonds and gemstones like emeralds, rubies, sapphires – the value of which over the years generally tends to increase even despite periods of market volatility. If these stones are investable, then technically all the engagement ring needs is an investment-worthy gemstone that will not lose value, but rather increase over time. So again, technically speaking: it’s all about the rock – size, cut, clarity. And therefore, the more rare and valuable your ring, the more likely it is to be strictly an investment piece. Yet, practically speaking, how many engagement rings are set with, say, an investment diamond of the same ilk as the rare Heart of Eternity blue diamond, valued at $16 million, and said to have been purchased by boxer Floyd Mayweather? for then-fiancée Shantel Jackson, circa 2012?

The bottom line

If your marriage ends up not being what you imagined, and we’re not necessarily talking divorce here; sometimes a couple can simply fall into a difficult financial time – it’s important to have a good ring which, if things go wrong, is an asset which, although it does not necessarily bring twice its value origin, has, at the very least, a good resale value.

LamarHarris, Vice President, Wealth Management, NCB CapitalMarkets

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