We know what inflation can do. Therefore, many people are considering how to protect their money or safely save their little money. Investment commodities can be a good and reliable choice.
The most famous are precious metals, especially gold and silver. On behalf of a strong Czech company, Adriana Kovács, commodity market manager in Slovakia, speaks of cooperation with clients as a mission. “I try to protect people’s finances so that current inflation does not harm them and their value is preserved, when not increased. In addition to the fact that money can be “converted” into gold or silver, our company also offers other options in the form of products, such as precious stones, either as a solitaire or embedded in jewelry, as well as exclusive investment watches. However, to avoid discouraging someone, these options are certainly not only for the most solvent. We also help those with deep pockets and explain how to store money so that they gradually repay gold ingots in small amounts. If you have earned a more significant amount or sold a property, we can evaluate the funds appropriately and interestingly. It also depends on how long the client wants to keep the money – a year, five, ten, or wants to have pension security…
Investing is one thing to maximize profit and another to preserve value for a long time. Which commodities are suitable for this?
Gold is a guarantee of value. It has been here for a very long time, about 2,700 years. It cannot be technically produced, and its value increases, among other things, because mining exhausts resources. Therefore, it can be considered as one of the safe havens. It is a conservative product for those who prefer low risk with guaranteed security. You can buy it through ingots, coins, medals, or jewelry. Investment ingots are available in different weights and types and are characterized by high liquidity.
What about silver? Unlike gold, it is subject to external economic influences…
Silver also has significant industrial uses and is also limited in quantity. Unlike gold, however, it is subject to VAT. It is a commodity suitable as an investment, especially for an extended period. For example, a small child can start saving by buying silver ingots, which then, for example, “work” for 20 or more years. In that case, it makes sense. Interestingly, many people also buy silver because they use it as an eco-friendly drinking water purifier. Investment silver, like gold, whether in the form of bars or coins, protects and appreciates your money in the long term. And the liquidity of both of these metals is high.
In addition to precious metals, let’s also mention precious stones. What to consider when choosing them?
It is difficult to recommend a specific stone. People usually choose them by personal preferences. Someone likes a red, green, blue or yellow stone… The basic factor is the amount we want to invest in purchasing the stone. Gems are also not an optimal commodity for a short period but for more than ten years. The number of carats and the stone’s quality also determine the price. You can invest not only in solitaire stones but also in jewelry. Our company offers not only ready-made jewelry but also the opportunity to choose a stone and have custom-made jewelry. Jewelry is usually inherited from generation to generation.
It is one thing to choose a commodity and another the company where you will buy it. So how to choose properly?
There are many sites on the Internet where you can buy gems, gold or silver, but you need to be sure that you are purchasing high-quality commodities. I consider the following guidelines to be the key: looking for a company with a long tradition and an operation where you can physically look at the products. It is essential to have a certificate for the product, who issues it, how long the company has been on the market from an economic point of view, and how long it has been dealing with this issue. These are the first clues to navigate by. Buying online is a risk. Last but not least, it is important to know whether the company can also offer you a purchase and confirm its terms in a contract at the time of sale.
How can an ordinary person without the necessary knowledge assess whether the gold or silver ingot is good quality, whether the precious stone has a suitable size, the declared number of carats, or whether it is even real?
Transparency of the company is a big positive. For example, with us, everyone who comes can see the precious stones under a special magnifying glass. We have a diamond tester and also certification. The client can thus check the company that issues the stone with the certificate. However, I understand that many still may not perceive it as a sufficient guarantee. We import our stones directly from the mines, not through other traders or brokers. And the buyback guarantee is very important. A big plus with us is the contracted purchase; you can sell the commodity, and the company is obliged to buy it from you. When shopping online, it may happen that the company mentions the possibility of buyback, but if you go into depth, you may find that in the end, the reality will be completely different; you are not buying the original but a beautifully colored stone.
The value of money is constantly declining
For example, is it necessary to notice where gold or silver coins and ingots are minted?
Yes, this is also an important aspect when choosing. For example, contracting on the London Stock Exchange is also a sign of credibility. We buy gold ingots in Switzerland from two of the highest-quality mining companies – Argor Heraeus and Valcambi. When buying numismatic coins, we also work closely with Kremnica, for example. Thus, tracking these flows can also indicate reliability when choosing the company you want to buy commodities from. Each ingot must have the metal’s weight, type, and fineness, the manufacturer’s brand, and a unique serial number.
Is it better to buy ingots or coins?
In this case, the first question would be what coins the client buys. The numismatic ones are produced in a few tens of pieces or coins minted in hundreds of thousands of pieces and more. It is interesting in times of buyout. The client finds out that they receive the value of the weight of gold; minting is not included. You can sell the ingot almost instantly; moreover, it has high liquidity anywhere.
Let’s have a look at a specific example. A 50-year-old client wants to save something for retirement and has a child they would like to save it for. What are the options if only a small amount is available per month?
When I discuss with clients how to help them how to keep their money in a certain way, I always ask them about their age, whether they have children, how they are secured, how much extra money they have, whether they have a second pillar, some savings, life insurance, what they plan for retirement. It seems that I want too much information, but if I want to find the most appropriate solution and be pro-client, I cannot move forward without this information. It is individual; we “tailor” options for each client to evaluate their money. There are saving products such as precious metals. We were the first to come up with the PNK model – a gradual purchase of commodities. Anyone can save at least 20 euros a month. You can pay off a selected ingot. If there is a situation they are unable to save, the repayment can be paused and continue when their condition improves. There are other interesting products; it all depends on the possibilities and expectations of the client.
Many may need clarification about where and how to store, for example, a gold ingot at home…
Simply in a safe place. The huge advantage is that you protect your property and have it physically under your control. And it is not uncommon for someone who has invested in art, for example, to have a painting on their wall for several thousand euros. You will certainly be able to store the gold brick much easier. If I had to mention where people hide their gold, I could give instructions for a week… (laughs)
Better not. The thief never sleeps. However, if someone is still afraid to store gold at home, can it be stored in a bank safe, for example?
In the Czech Republic, we have a company where commodities can be stored for a fee; in Slovakia, we do not. However, it is safest to keep gold at home. Another important thing is diversifying your deposits. You don’t have to put everything into gold. It is recommended to have a varied investment portfolio so that the individual components are not dependent on each other. If you make a loss on some, others will earn you money. However, the advantages of gold also include the fact that it is independent of the movements of other assets, such as stocks, real estate, bonds, etc. Gold is really a safe haven.
Gold is eternal. It cannot be produced technically, although alchemists have always tried to do so. But what about gems? Does the value of natural and synthetically produced differ? Will the value of artificial gems fluctuate over the years precisely because of this fact?
Synthetic diamonds or other gems are also valuable. I am not an expert in stones, but it is certainly an interesting investment, but really for those who have more money. Today, beautiful blue tanzanite is in the spotlight. It is a remarkable commodity, although it is a young stone. It will become increasingly rare, there are only four mines in the world – in Tanzania – hence its name, but two have already ceased mining. Its price rises sharply when mined in the other two mines.
They say that good advice is better than gold. Do you have any?
The value of money is constantly declining. Classic saving – saving euros in a “stocking” or collecting them virtually is not the optimal solution. Gold has been here since immemorial; its price has multiplied, and inflation does not threaten it. It is easily portable, easy to store, anonymous, exempted from VAT, and has fast liquidity – sale, exchange, establishment, donation, jewelry production, etc. Historically, it has maintained a stable value for millennia in relation to comparable goods. However, where you buy it, its liquidity and repurchase are important. Therefore, shop cautiously so that you do not have eyes left for crying when, in the best case, you make a lot of money; in the worst case, you will find that you only own stained metal or stone.
Did you know?
Fineness – Expresses the relative weight of the precious metal in the alloy. For coins, medals, and ingots, it is given in thousands. Pure gold with a minimum of impurities has a 999.9 or 999.9/1000 fineness. Thus, such a 1000 g ingot contains 0.1 grams of other elements. The rest is gold. Fineness can also be expressed in carats, but this is a jewelry-making custom. Pure gold is 24 carats. The purity of silver is expressed similarly. The pure one has the designation 999 or 999/1000. Thus, the precious metal consists of 999 parts, while the remaining consists of admixtures.
Troy ounce/oz – This unit of weight is used in the world’s precious metal exchanges. The name is derived from the French city of Troyes – an ancient center of commerce, where precious metals were also traded, and units identical to the troy ounce were used. 1 oz is 31.1 g of precious metal.
Text: Miriam Bartošová, photo: www.stock.adobe.com
