Gold has been in great demand over the several years. It has outperformed most other asset classes, giving year on year positive returns for the last several years.
Below are 5 gold investment tips for readers:
1 : START INVESTING EARLY IN GOLD
Gold is a precious metal and acts as a strong hedge against inflation. Gold precious metal and is mined in very small quantities across the world. Demand for gold will always outstrip the supply. The demand is not only from the retail customers but also from the central banks across the world. According to a world gold council data, Central banks and the IMF are the largest bullion owners with 29,500 tons at the end of last year, this is around 17 percent of all mined metal. These facts make a strong case for making gold a part of your portfolio. So it needless to say that prudent on your part to start investing in gold early on in life.
2 : MAKE GOLD INVESTMENTS 10-20% OF YOUR PORTFOLIO
Depending upon your risk appetite, 10-20% of your portfolio should be invested in gold. This includes all forms of gold investments you own (gold bars, jewellery, etfs). Gold has given year on year growth over the last several years. Gold is also negatively co-related to most other asset classes like equities, bonds etc. As I have already mentioned in the previous point, it is a strong inflationary hedge during times of negative real return.
3 : DON’T BUY PHYSICAL GOLD AS A FORM OF INVESTMENT
Majority of Indian still buy jewellery or gold bars and coins as a form of gold investment. When you buy jewellery, you have to pay the making charges plus value added tax. As a result the net cost per gram of gold will be much higher. Also when you buy physical gold as a form of investment, you will need to make arrangements for safekeeping as keeping physical gold at home is not safe by any means. So you might need to get yourself a bank locker for which you have to pay an annual charge.
4 : BUY ELECTRONIC GOLD OR GOLD MUTUAL FUNDS
Buying electronic gold like gold ETFs/ NSEL e-gold/ gold mutual funds is advantageous over buying physical gold. The minimum investment can be equivalent to the price of 1 gram of gold for ETFs and NSEL e-gold. You don’t have to worry about safe keeping, there are no making charges. You can buy a Gold ETFs /NSEL e-gold/gold mutual fund online as well.
For ETFs and NSEL e-gold you would need a demat account, but now demat accounts have become very common in India. However, you don’t need a demat account for investing in gold mutual funds. Investing in electronic or paper gold is easier, convenient, secure and tax-efficient to when compared to physical gold.
5 : MAKE INVESTMENTS THOROUGH A SYSTEMATIC INVESTMENT PLAN
NSEL e-gold and Gold mutual funds allow investors to make systematic investments (SIP). The minimum monthly investment in NSEL e-gold is the price of 1 gram of gold, while the minimum amount of monthly investment in a gold mutual fund can be as low as Rs. 500. When you invest through the SIP route you benefit from rupee cost averaging and by being a disciplined investor and investing a fixed amount every month, you can create wealth over time.
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Below are 5 gold investment tips for readers:
1 : START INVESTING EARLY IN GOLD
Gold is a precious metal and acts as a strong hedge against inflation. Gold precious metal and is mined in very small quantities across the world. Demand for gold will always outstrip the supply. The demand is not only from the retail customers but also from the central banks across the world. According to a world gold council data, Central banks and the IMF are the largest bullion owners with 29,500 tons at the end of last year, this is around 17 percent of all mined metal. These facts make a strong case for making gold a part of your portfolio. So it needless to say that prudent on your part to start investing in gold early on in life.2 : MAKE GOLD INVESTMENTS 10-20% OF YOUR PORTFOLIO
Depending upon your risk appetite, 10-20% of your portfolio should be invested in gold. This includes all forms of gold investments you own (gold bars, jewellery, etfs). Gold has given year on year growth over the last several years. Gold is also negatively co-related to most other asset classes like equities, bonds etc. As I have already mentioned in the previous point, it is a strong inflationary hedge during times of negative real return.
3 : DON’T BUY PHYSICAL GOLD AS A FORM OF INVESTMENT
Majority of Indian still buy jewellery or gold bars and coins as a form of gold investment. When you buy jewellery, you have to pay the making charges plus value added tax. As a result the net cost per gram of gold will be much higher. Also when you buy physical gold as a form of investment, you will need to make arrangements for safekeeping as keeping physical gold at home is not safe by any means. So you might need to get yourself a bank locker for which you have to pay an annual charge.
4 : BUY ELECTRONIC GOLD OR GOLD MUTUAL FUNDS
Buying electronic gold like gold ETFs/ NSEL e-gold/ gold mutual funds is advantageous over buying physical gold. The minimum investment can be equivalent to the price of 1 gram of gold for ETFs and NSEL e-gold. You don’t have to worry about safe keeping, there are no making charges. You can buy a Gold ETFs /NSEL e-gold/gold mutual fund online as well.
For ETFs and NSEL e-gold you would need a demat account, but now demat accounts have become very common in India. However, you don’t need a demat account for investing in gold mutual funds. Investing in electronic or paper gold is easier, convenient, secure and tax-efficient to when compared to physical gold.
5 : MAKE INVESTMENTS THOROUGH A SYSTEMATIC INVESTMENT PLAN
NSEL e-gold and Gold mutual funds allow investors to make systematic investments (SIP). The minimum monthly investment in NSEL e-gold is the price of 1 gram of gold, while the minimum amount of monthly investment in a gold mutual fund can be as low as Rs. 500. When you invest through the SIP route you benefit from rupee cost averaging and by being a disciplined investor and investing a fixed amount every month, you can create wealth over time.
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