In the world of investments, precious metals such as gold, silver, platinum, and palladium have long been a popular choice. Their value often rises during periods of economic uncertainty, making them an attractive option for investors seeking safety and stability. But how do you decide on the right investment in precious metals? To find out, we spoke with Bojan Pravica, a renowned financial advisor who has dedicated his life to advising on smart investing and saving.
Gold, known as one of the most stable investment instruments, boasts unique characteristics that set it apart from other commodities. Bojan Pravica, a recognized expert in precious metals, emphasizes that gold is the only major commodity whose value continuously increases throughout history, reaching new record values, while other commodities mostly fluctuate within certain price ranges.
Why is Investing in Precious Metals Important?
Bojan Pravica emphasizes that precious metals serve as a safe haven for your savings during economic crises. “Throughout history, we have repeatedly seen the value of gold and other precious metals rise when markets fall. This is because investors seek safe investments that retain their value,” says Pravica.
Besides safety, precious metals also offer portfolio diversification. “If you already have investments in stocks, bonds, cryptocurrencies, or real estate, precious metals can add balance and reduce the risk of your investment portfolio,” adds Pravica.
Journalist: Mr. Pravica, why do you believe that precious metals are a good investment in the current economic climate?
Bojan Pravica: We are currently witnessing significant economic challenges such as inflation, instability in financial markets, and geopolitical tensions. In such times, people look for safe investments that can maintain their value. Precious metals, especially gold, have proven to be a safe haven for savings during crises for centuries.
Journalist: Which precious metals do you recommend for investment and why?
Bojan Pravica: I most often recommend gold and silver because they are the most liquid precious metals recognized worldwide. Platinum and palladium are also good choices but are more volatile and harder to sell. For long-term investments, gold is still the king.
Bojan Pravica: It is Important to Understand the Market Before You Start Investing!
For beginners deciding to enter the precious metals market, Pravica advises starting with education. “It is important to understand the market before you start investing. There are different options such as buying physical gold, silver bars or coins, or investing in funds that track the price of precious metals,” he explains.
Pravica emphasizes that choosing the right strategy is crucial. "Some investors opt to buy physical gold because they want to have something tangible in their hands. Others choose ETFs or so-called mining funds because they want to take advantage of price growth without physically storing metals," he says.
Journalist: How should investors decide whether to invest in physical metals or financial instruments such as ETFs?
Bojan Pravica: It depends on your goals and risk tolerance. Physical metals are great for those who want to have something tangible and protect themselves from systemic risks. ETFs and mining funds offer greater liquidity and easier trading. It is important to understand the risks and benefits of both approaches and tailor them to your investment strategy.
When Investing in Precious Metals, Investors Often Make Costly Mistakes …
Investors often make mistakes when investing in precious metals, such as superficial (or non-existent) market research and understanding, leading to wrong decisions and missed key signals. Too often, storage costs of investment gold are underestimated and liquidity ignored, as physical precious metals require secure storage. Additionally, investors frequently underestimate price volatility, which can cause short-term losses.
"Following the crowd and investing based on current market sentiment instead of making thoughtful decisions can lead to poor results," warns Bojan Pravica.
It is also important for investors to consult financial advisors who can help them understand market complexities and formulate an appropriate investment strategy.
Journalist: What are the biggest mistakes that investors make when investing in precious metals?
Bojan Pravica: One of the biggest mistakes is that investors invest without research and understanding the market. Many investors also underestimate the costs of storing and insuring physical metals. I recommend consulting a financial advisor and creating a long-term plan. Investing in gold is indeed a marathon, not a sprint.
Investing in precious metals can be a great opportunity for diversifying and protecting your wealth. However, it is important to educate yourself, understand the market, and develop a long-term strategy. As Bojan Pravica says: “Precious metals are not just an investment but also a safety net in uncertain times.”
Precious metals will always have their place in the world of investments. With the right approach and strategy, these valuable metals can contribute to a secure and stable future for your finances. Are precious metals already part of your investment portfolio?