Dhanteras 2019: Buying gold this Diwali can make you rich till next one! Here is what you must do
In fact, if you go by modern thinking, you can put your money in the yellow metal in the form of Gold ETF, Gold Funds or Sovereign Bonds. However, it is essential to know about the prevailing rates of gold in the market before taking a decision to invest.
Dhanteras 2019: The tradition of buying gold on Dhanteras is quite popular in India. Buying precious metal on this auspicious day is considered auspicious and it is believed that Goddess Lakshmi comes to shower her blessings on Dhanteras. You can also choose this day to invest your money in gold to ensure a better future for yourself. Also, if you are considering buying gold for investment purposes, it is not a must that you purchase physical gold. In fact, if you go by modern thinking, you can put your money in the yellow metal in the form of Gold ETF, Gold Funds or Sovereign Bonds. However, it is essential to know about the prevailing rates of gold in the market before taking a decision to invest. Sugandha Sachdeva, Religare Broking and Amit Kukreja, Founder Wealth-being have shared their Gold investment tips with Zee Business viewers.
Kukreja suggested that investors buy ETF funds like Nippon India ETF, HDFC Gold ETF, SBI Gold ETF, Kotak Gold ETF and UTI Gold ETF. He said that one should avoid investing only in one asset class. The ideal portfolio should hold less risk and higher growth aspects. They can put 5% to 10% of their funds in the form of gold in portfolio.
Meanwhile, Sugandha said that gold has fetched over 20% returns since last Diwali and this is the right time to buy gold at current price. Despite global concerns, gold demand is expected to remain good and may fetch up to 14-15% returns possible till next Diwali, she added.
- Why invest in gold?
Gold prevents the effect of inflation in long term, this is why the investors should keep it as a hedge against inflation. Gold price generally moves in the opposite direction to the stock markets. In case the stock markets crash, gold offers positive returns and vice-versa. In order to reduce portfolio fluctuations, you can always invest a little portion of your portfolio in gold. It is a great hedging
- Ways to invest in gold
1. Gold Jewelery
2. Gold Coins
3. Gold ETF
4. Sovereign Gold Bond
5. Digital Gold
6. Gold Mutual Fund
1. Gold Jewelry as investments
Buying gold jewelry is also an investment avenue. It is an option for passing on an inheritance to the next generation. While some people also invest in jewelry to make a fashion statement - purchase this metal as a status symbol. People also give jewelry as a gift in weddings. Unlike other forms of gold, Jewelry has a making charge additional to the actual cost of gold, which turns into a loss at the time of selling.
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2. Gold coins as investments
Spot Gold is one of the best physical option to invest in gold. You can buy Gold Coins, Gold Bar, Gold Bricks and avoid less or no making charges. Spot gold can be bought directly from the market and can be kept in physical form in house or lockers.
3. Gold ETF as investments
ETFs are an exchange-traded fund and just like shares of several companies, they are listed on stock markets. Gold ETFs can be bought or sold via demat account or broker. There are a number of gold ETFs listed on the Indian stock exchanges. You can buy gold in units, where one unit stands for one gram of gold. It also has an annual expense of 1%. The gold purity in gold ETFs is 0.995% or more.
4. Gold Mutual Funds as investments
The gold mutual funds invest in gold mining companies and returns from such funds are dependent on the performance of these companies only. You can invest in gold funds by means of SIPs.
5. Sovereign Gold Bond Scheme
The Government of India's Sovereign Gold Bonds Scheme can earn you an assured interest rate eliminating risk and cost of storage. Redemption is linked to gold price elimination of risk and cost of storage, exempt from the capital gain tax if held till maturity etc.
6. Digital gold
Earlier, to invest in physical gold many people had to wait till they saved enough money to make the minimum or desired purchase. With the advent of Digital Gold that is no longer the case as you can buy the precious metal in denominations as low as Rs 10 even.
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