Is Gold a Good Investment?

Gold is women’s first love in India. Most of Indian families have some amount of gold in the form of gold jewellery. But very few people actually buy gold as an investment. Indians prefer real estate property over other asset class because of ever increasing population. But from last couple of years land, flats and other real estate properties are not giving any return. Also, this asset class has extremely low liquidity. Because of these problems small investors are looking for other assets.

Government is pushing public towards share market as it has huge disinvestment objective. Since last few months stock market is at its highest level even though economy is going down. Stock market can give high return but it is very risky and need lot of research to make money. That’s why it is better to enter in stock market through mutual funds and always buy on the advice of your financial advisor. To learn about mutual funds please read my blog by clicking here

Keeping money in banks is no longer beneficial due to high inflation. Your savings in banks will reduce with time due to inflation. Thus, to beat inflation, investment in gold is good idea. Gold has higher liquidity than real estate and less risk than equity. Gold can be a good investment if we invest smartly. Besides physical gold, there is several other option of buying gold. You can buy Sovereign gold bonds or you can invest in gold ETF (exchange traded fund) or you can even buy gold mutual funds.

While physical gold can have safety problem, purity problem and buying and selling problem, digital gold can be a better alternative.  Sovereign gold bonds are the best option if you want to invest in gold for longer term. Not only your investment will increase with increasing gold price, but also you will get 2.5% annual return on your gold bonds. You can buy these bonds from any public national bank and even from some private banks that too provides you with the facility to buy them such as ICICI bank.

Other method to investing in gold is ETF gold fund and gold mutual funds. For ETF gold fund you need a Demat and trading account. So if you do not have trading account and don’t want to open one, you can opt for Gold mutual funds which invest in Gold ETF funds. You should also invest in gold to diversify your portfolio. Invest 10-15% of your total investment money in gold. It will diversify your portfolio and save your money from inflation.

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