Investing in gold

Economics   09 January 2020 2:44:PM

GOLD is not only valued as an ornament but the metal is also a popular form of investment in India. Most of the families treasure gold for ages passing it on from one generation to other as a form of asset. But the physical gold has the risk of depreciation (due to several charges such as making-charge, level of gold purity) and of theft. So, the best way to invest in gold is through Gold ETFs and Fund of Funds (FoFs). You don't have to invest lump sum amount at once, start with a small amount such as Rs 500 through regular monthly SIP in Gold FoFs. This will not look big in short time but over the years you will enjoy its growth potential.

Some of the advantages of investing in gold include: 

1) Hedge against inflation:

 Gold has shown positive results even during the economic downturn and market volatility. It serves as the best hedge against inflation. Gold has seen strong asset appreciation in long-term and emerged as must have in one’s investment portfolio.

2) Portfolio diversification:

 Gold is an easy and convenient way to diversify your investment portfolio.

3) Start with small amount: 

You can start investing in gold with a small amount to save regularly for the long-term. 

4) Easy liquidity:

 You can subscribe and redeem your gold fund as and when you need. 

5) Tax Benefits:

Some of the gold funds such ad SBI Gold Fund is treated as a non-equity product from the tax perspective. You can claim long-term capital gains tax benefit on these funds after a period of one year of investments.


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