Gold is a grateful material because it is very durable – it does not rust, is easy to form, conducts heat and electricity. Thanks to these properties, the ways of applying gold are very diverse – it is used not only as currency and in the jewelry industry, but also in manufacturing.
There are several ways to invest in gold, such as buying physical gold bars, buying gold coins, buying shares of funds or ETFs whose value depends on gold, or becoming a shareholder in a gold mining company. You can also buy so-called gold futures contracts, that is, enter into an agreement that includes a commitment to purchase the raw material at a specific time in the future at a predetermined price.
has its pros and cons. For example, a gold bar creates a sense of security because it exists physically, but if a crisis comes, how easy would it be to realize it in the market and at what price? It should also be taken into account that the storage of gold bars is associated with costs. On the other hand, coins released in small quantities have additional symbolic value, but not all coins attract the attention of collectors. The Bank of Latvia also regularly issues gold and silver collection coins, which residents can purchase in the hope of their value increasing in the future.
Fund shares, shares and “futures contracts” are relatively liquid financial instruments, they are easy to buy and sell. An additional risk is related to the successful operation of the particular company.
The most valuable gems are ruby, diamond, sapphire and emerald. Investing in precious stones can be compared to investing in works of art, because each precious stone is also unique, so they are suitable for connoisseurs and aesthetes, because such an investment will also provide aesthetic pleasure. Minerals are evaluated by size, grinding and other parameters, however, it is not always worth buying the most expensive ones. Market data shows that lower value gems can increase in price more significantly and are easier to sell on the market.
However, when it comes to gemstones, one must be very wary of fakes and gemstones should only be purchased from a trusted seller, preferably with a laboratory certificate.
It should be taken into account that the value of precious stones is also affected by developments in the economy. For example, the price of a diamond decreased during both the 2008 global financial crisis and the Covid-19 pandemic, however, in the long term, the price of precious stones increases by an average of 5-8% per year. Investing in precious metals is definitely not a short-term investment, the minimum time is ten years, preferably even 15 or 20 years.
