In ancient times, Gold was viewed as a sign of wealth, and in today's world, Gold is viewed as an investment. Individuals have various gold investment options like gold mutual funds, bars, and coins. It is one of the most popular type of investment in India.
Gold investments always retain their value even during times of economic uncertainty. This type of investment can also offer a high level of protection from inflation and is an excellent portfolio diversifier.
How to Invest in Gold?
Some of the traditional ways you can easily invest in Gold are purchasing physical Gold like jewellery, coins and bars. But apart from that, there are several other ways you can easily invest in Gold. These are:
Gold Exchange Traded Funds [ETFs]
This is a type of investment where the units are paper or dematerialised representation of the physical Gold. It's similar to how you make a direct investment, but here, you can purchase proportionate ownership within a collective vault rather than purchasing Gold in physical form. So, one unit of gold ETF is equal to one gram of Gold and it is backed by high purity physical gold.
Check Out - Aditya Birla Sun Life Gold ETF
Gold Schemes
Many jewellers nationwide will provide you with gold schemes to buy Gold easily. But, not all gold schemes are the same, as they differ greatly from one jeweller to another. You will find several gold schemes that work through steady investments.
You have to invest a quantity for a certain time so that you can generate a good amount. You can then utilise that amount to purchase Gold.
Gold Mutual Funds
Gold mutual funds are one of the best types of gold investments available in the country. This investment will free you from the compulsion of storing and purchasing physical Gold. Through gold mutual funds, you don't invest your funds in Gold but in the gold mining organisations.
Check Out - Aditya Birla Sun Life Gold Fund
Digital Gold
This is another great investment option that has gained a lot of popularity these days. Digital gold functions just like digital payment, where you can sell or purchase the Gold from the FinTech platforms.
What are Sovereign Gold Bonds?
SGBs, popularly known as "Sovereign Gold Bonds," is a safe scheme that will enable you to get a return on Gold and an interest, which you will get at the rate of 2.5%. SGB is a government scheme that works as an excellent alternative for holding the gold in its physical form.
The amount of Gold you pay for will stay well-protected because you will get the ongoing market price during the premature redemption or time of the redemption.
Furthermore, as an investor, you will be guaranteed the Gold's market value during the period of maturity. Sovereign gold bonds do not come with problems like making charges, etc.
All the bonds are kept within the books of the Reserve Bank of India. Otherwise, you will find them in the Demat form, which reduces the perils of loss of script and many more. The SGB bonds also come with many types of features, such as:
There are no dangers of storage
No presence of cost for storage
Provides return during maturity
The chances of impurity
What Documents Do You Need to Invest in Gold?
When you have decided to invest in Gold, you have to provide certain documents to proceed further with the investment work. These documents are:
Adhaar Card
Pan Card
Voter Card
Passport
When providing the documents, it's advised that you double-check all the information. Providing wrong or incorrect information can prevent you from making an investment in gold. So, check all your documents right before you submit them.
Why Should You Prefer Investing in Gold?
There are countless individuals across the country who invest in Gold. They mainly do so because the investment does not carry any type of risk. But apart from that, there are certain other reasons to invest in Gold:
Helps You Fight Inflation
It doesn't matter what work you do, there is no way you can escape inflation once it takes place. But you can surely beat inflation by investing in gold. It's because gold can retain its value without much hassle.
Gold's value also sees an increase when there is an increase in the cost of living, and on certain occasions, it increases a lot more during the inflation phase.
Demand and Supply
Gold is a crude resource, and its supply is limited. This clearly means that the demand for gold will always be high. When there is a high demand, the gold price will also increase. Due to such reasons, this precious metal stands out as an outstanding investment in the country.
The market and supply of gold in India are always high because every celebration or event is incomplete without it.
The Portfolio Diversification
When you expand the investment range, it can help you balance the risk properly. Gold's value is inversely equivalent to old-style investments, such as stocks. Through this method, gold investments in the country will be a much safer option against the market's unpredictability.
Crisis Commodity
On certain occasions, gold is pictured as the "crisis commodity". It's because gold can retain its value during crucial times. This precious metal can easily survive the monetary and geopolitical uncertainties.
Due to such reasons, many nations have massive reserves of this metal to fight all kinds of situations or events that might take place.
Balances the Money Deflation
The financial markets can also experience uncertainties, which can cause all the strongest currencies to lose their respective values.
But when it comes to gold, it's an asset that you cannot develop with the help of a machine. In India, you can keep yourself well-protected from currency devaluation by investing in gold.
Conclusion
Gold investment is one of an outstanding form of investment, which many people opt for. There are many ways through which you can invest in gold without much hassle. But you should only invest in gold after considering all the benefits, risks, availability, costs, and liability.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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