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Here are Beginner’s Guide to Investing in Gold
by Black Bow Chauffeur Content WriterThe stock market has peaked this year due to the economic impact of the epidemic, prompting most investors to find ways to hedge their portfolios. During this period, an asset started gaining traction - gold. If you are considering investing in gold, but are unsure of how to get started, then there is a quick guide to get acquainted with gold investment in India.
Why should you consider investing in gold?
While people in India bring gold for various reasons, usually cultural or religious, it has also appealed as an investment option. Here are some things that work in favor of gold:
1) Long term reserves of value - For centuries, gold has been the best stock of value for the long term (reserves of value are an asset that maintain its value without depreciation). The fact that it can play the role of money adds to its superiority and its superior performance of currency makes it attractive.
2) It will always have value - currency is a 'promise to pay'. On the other hand, Gold does not require any such promise. It is the only financial asset that is not someone else's liability at the same time. In its 3000+ year history, gold prices have never been zero. So even if the market falls, its value will always be strong and strong.
3) Rate of Inflation - When the rate of inflation rises, the value of the currency falls. However, in the last five years, despite the increase in the rate of inflation, today gold rate in delhi have doubled. In India, where the rate of inflation is higher than the interest rates, investment in gold is a hedge against inflation.
4) Liquidity - One of the most important features of gold investment is liquidity. Gold can be bought and sold in a very short time.
5) No special knowledge required - When you buy stocks or invest in mutual funds, you need some knowledge of the market and economy to make the right decision. With gold, no such knowledge is required. It is easy and simple for all types of investors to invest.
6) Helps diversify your investment portfolio - As an asset class, gold has a low / negative correlation with other asset classes. Therefore, it is helpful to diversify or hedge your investment portfolio against market fluctuations.
What are the different ways to invest in gold?
Traditionally, the only way to shop for gold was to buy jewelry. Over the years, different ways of owning gold have emerged, including its variants as well as various types of physical gold and paper gold. Here are some ways by which you can invest in gold:
1. Digital Gold
One of the most convenient and cost-effective ways to invest in online gold is digital gold. This product allows you to buy and sell gold in fractions at any time. You can invest in gold with 10 rupees! Each digital gold you buy is backed by physical 24k gold and is linked to real-time gold prices.
2. Gold Coins or Bars
To protect the 'making charge' that applies to gold jewelery, many investors choose gold coins or bars. Since these coins / bars do not require skilled artistry, the charges do not apply. Today, you can buy these coins or bars from jewelers, banks, e-commerce websites and many non-banking finance companies.
3. Gold Saving Scheme
Jewelers across India offer several schemes to help people invest in gold in installments. Typically, a jeweler allows you to deposit a pre-determined amount every month for a specific period. At the end of the term, they can buy gold from the same jeweler at a price equal to the deposit, plus a bonus (if offered by the jeweler). Gold can be purchased at the price of gold prevailing at maturity.
4. Gold Sovereign Bond
Gold sovereign bonds are the safest way to buy digital gold, issued by the Reserve Bank of India (RBI). The RBI issues them on behalf of the Government of India. These bonds have a fixed interest of 2.50% per annum. The bond has a lock-in period of five years and an overall tenure of eight years.
5. Gold Mutual Fund
These funds invest directly or indirectly in gold reserves. They typically invest in shares of mining companies, physical gold, and gold production and distribution syndicates. The performance of these funds is usually linked to the performance of gold rate today in mumbai in the country.
6. Gold Exchange Traded Funds (ETF)
These are ETFs that invest in gold as an asset class and allow you to trade units on the stock exchange. They give the benefit of investing in gold to the pros and cons of ETFs.
7. Jewelry
As Indians, we own gold jewelery. Whether it is for religious, cultural or financial reasons, gold jewelery has always found a place in most of the homes of our country. However, being a valuable metal, jewelry safety is of high concern to investors. In addition, gold jewelery includes charges that can increase up to 25 percent if the design is complicated. These charges are irrevocable once you decide to sell the jewelry.
If you are thinking of including gold as an asset class in your investment portfolio, we hope that this article helped to get a better hold on gold investment. Remember, any investment should be made after considering your financial goals, investment horizon and risk tolerance. If you need clarification, learn more about gold investing and talk to an investment advisor.
Muthoot Gold Point is leading gold buyers in India, offers safe, transparent & scientifically tested ways of buying your Gold.
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About Black Bow Chauffeur 
Content Writer
7 connections, 0 recommendations, 29 honor points.Joined APSense since, November 5th, 2016, From Noida, India.
Created on Dec 25th 2020 13:40. Viewed 318 times.
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