When investing your hard-earned money, one needs to evaluate all aspects before advancing. A few commonly occurring queries answered by Bullion India Experts in gold investment are,
Why invest in gold?
There are many reasons one needs to purchase gold, gift giving, personal use, marriages and as a future investment. India is the largest market for gold jewellery in the world. Not always does one question the working of gold investments, although, when investing in gold as a future investment, one needs to know if it is worthwhile.
Investing money in gold as an asset is worth it, as gold is a hedge against inflation. In the long term, the returns on investment in gold are in line with the rate of inflation.
Secondly, one must know that gold is negatively interrelated to equity investments. Which means if the equity market performs poorly gold performs well. Thus, having a gold investment on your portfolio helps reduce risk, and make the portfolio versatile.
How to invest in gold in India.
Gold as Jewellery: Jewellery buying is a traditional way of investment in gold in India. People prefer jewellery buying to other means, due to its usability. However, this form of purchase is not the best form of investment. The reason being, the total buying cost of gold jewellery involves making charges, which amount to over 10 to 20% of the gold cost. However, during resale of the same jewellery, jewellers deduct the making charges and offer below market rates for the jewellery.
Gold in the form of Bullions: Investment in Gold coins and bars is recommended over jewellery. These are highly pure 24-karat gold bars and coins, with high fineness. This is not a wearable form of jewellery, although it has a higher market acceptability and resale value than traditional jewels. Bullions in varying weights can be bought from financial institutions, bullion retailers like Bullion India and even jewellers for their price in gold weight. This purchase includes a dealer’s premium and gold rates may be spot prices that are lower than the market price. Bullions bought at Bullion India, can be redeemed or stored in free vaults provided for safe keeping.
SIP investment in gold in India: Buying Gold online in India through an SIP (systematic investment plan) is a more affordable way of gold purchase. One can opt to pay a small amount on a monthly basis over a chosen period to accumulate its worth in gold. The gold purchased with each payment over a time, provides one a staggered pricing hence averaging the purchase cost. One can redeem the gold once the payment terms are complete. Bullion India offers SIP investment opportunities that make buying gold affordable (as low as Rs. 1000 a month).
How much to invest in Gold?
Bullion India Experts believe that 5% to 10% of one’s assets should be invested in the form of gold.
When to invest in gold?
One cannot predict a right or wrong time to invest in gold in India. It is recommended one invest in gold for a long term ( 5+yrs) and stagger the investments over a long period to average the purchase cost.
Gold is an expensive commodity, investing in it needs clarity of mind and patience. The above compilation by Bullion India aims at highlighting the various ways to invest in gold in India and answering various queries one faces when making an investment in gold in India.