Investing in Gold. Should you?

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You probably heard of this at some point of your life, that is “Old is Gold”. It’s true. But I would like to rephrase it in a different manner in context of investment that “Gold is old”. Yes it is! Gold as a investment has become very old these days. As an Indian we have to admit that we love Gold. In fact India is the one of the largest consumer of Gold. Earlier whenever we think of investment we buy gold. But things are changing now a days.

We have got access to various investment instrument like shares, bonds or deposits. Gold is a asset class which are not productive in nature like other assets like shares.

“A pile of gold will stay the same pile of gold as time passes”.

Yes! Buying gold is an excellent passive investment & every household should invest to protect themselves in bad times.

Investing in gold makes sense only for those who don’t have access or trust in the financial system or financial market. It is good for them.

But those who are financially sound person and have some bit of a knowledge about the financial market should always go for asset class which are productive in nature or investment. Buying gold for them should only remain as an asset which will protect their financial position in the market in bad times.

Lastly I would like to say, that if whatsoever you are buying gold,”Don’t go for physical gold”-Because there are drawbacks such as, storing cost in bank lockers, fear of being stolen and some part of depreciation at the time liquidating. There are various modern forms of gold which overcome the drawbacks of physical gold like “paper gold”.There are gold backed mutual funds, Gold ETF’s. However if you don’t mind locking money for 8 years, then Government of India issue gold bonds from time to time. These are tax free as well and you get an extra 2.5% interest p.a every year as a bonus.

Therefore I would like to conclude by saying, Invest in gold in a modern way through Gold bonds, Gold ETF’  or Gold mutual fund & try not to buy physical gold for investment purpose.

 

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One thought

  1. Very true.. Buying a gold nowadays is like just keeping hard cash in locker with no or negligible appreciation over time.. We could simply see 18% cagr in our market index so why not invest there. But I must also add that as an Indian tradition, we have known as Gold lover and it is in our vein actually so considering that we could have gold jewelleries only to the extent that is required as day-to-day ornament purpose.. Nd rest could be liquidated nd invested in diff. Asset class for more appreciation..✌

    Liked by 1 person

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