Buying gold is the oldest way of investing. There are many traditional Indian views about gold such as it is the best passive investment, protects you in bad times and every household should invest in it.
Gold has played a major role in the economies of many nations, it was primarily the currency for many nations, though it is no longer a primary currency now, but still has a lot of value. Golds are easy to buy and are easily liquefied asset which can be relied upon in your financial tough time.
But the time has changed and now people have many options to invest in. These options are Stocks, real estate, mutual funds, SIP and so on. However, many of these involve risk factors and there are chances of your profit and loss both. Whereas some are dependent on the market fluctuations. Generally, markets face a lot of volatility and have been fluctuating with increasing frequency in the recent days. In such a situation, people are more prone to risk and losses and hence are worrying about their investments.
Why Invest in Gold?
Everyone wants to be financially safe and hence, try to find the safest way of investment to grow their money. Investment in gold is such a way which minimizes your risk. The place where high risks are involved, people should stop worrying about returns and should first try to be safe.
The best way to tide these market volatility and being safe is setting your financial goals and investing according to that. For being in the safe place people should invest in both which can bring more return with minimum risks as well as should invest in Gold. Gold is gold and will definitely give you returns. This way you can manage your investment and achieve your financial goals as well.
Importance of Gold in the Modern Economy
It is a fact that gold will never be back again the U.S. dollar (or other overall monetary standards so far as that is concerned), for what reason is it still vital today? The basic answer is that while gold is no longer in the front line of ordinary exchanges, it is as yet vital to the worldwide economy. To approve this point, there is no compelling reason to look more remote than the accounting reports of national banks and other money-related associations, for example, the International Monetary Fund. These associations are in charge of holding roughly one-fifth of the world’s supply of over the ground gold. Moreover, a few national banks have added to their present gold stores, reflecting worries about the long haul worldwide economy.
Advantages of Investing in Gold
Gold can be easily be liquidated and can be converted into cash form. This is possible to do anywhere in the world. The value which comes when liquidated is the same as that in its solid form. Hence, it is the best way to invest where you can convert it in money form whenever required. Whereas in other investments there is no surety that the returns you get after liquidizing will be same or not.
Gold Maintains its Value Over Time
Even if the price of gold changes but not its value. Even if the price decreases, the value of gold does not change much.
Gold is not involved in any inflations and is a safe and stable investment. Hence, during inflations, gold offers a much more stable investment than other investments.
It has many secure sides and minimizes the risk of your investments.
Gold is a universal commodity. Although it is no longer a currency, still its value is intact. People all over the world invest in gold for a safer side. For example, a gold ornament is equally valuable in the US as it is in India or in UAE.
Gold is Gold
Jewellery, Gold Coin, and gold bars, collecting these are some of the ways gold can become an investment. This can add to your portfolio and your investment value.
Cons of Investing in Gold
- When you invest in gold the only returns you can get is the price of gold and profit only when the price is higher and you sell it. This will also not give you much profit as the change in the price of gold is negligible only.
- When you have physical gold as an investment, then you need to invest a little further to keep that gold safe.
- Gold is considered as a collectible and hence its tax rate is higher than other ordinary capital gains. You may enjoy tax benefits when invested in other investments but here the chances are very less.
How to Purchase Gold for Investment?
When you are investing, you should know the diverse ways of purchasing and investing in gold.
Ornaments, the most customary and the prevailing type of purchasing gold in India, is in reality not a speculation though. The reason is that there are substantial misfortunes as wastage and making charges. This can shift from at least 10 for every penny to as high as 35 % for extraordinary and complex plans.
Bank coins, once more, are not a venture thought as the top notch that banks charge for their coins is around 5-10 %. Likewise, the bank coins have lesser liquidity as they are not purchased back by the banks.
Bullion bars are great modes for speculation, however, the base venture here is considerably higher than a typical speculator can consider.
Gold Exchange Traded Funds (ETFs) are a hot alternative nowadays. These resemble common subsidizes that put just in gold. They are ended up being a less demanding and more secure mode to purchase gold. The charges are less and the gold can be gotten too electronically. The hindrance is that one never gets the chance to “see” one’s property.