Precious metals, especially gold, have always maintained their value in the face of a depreciating market. The primary reason is that the price of gold possesses a low correlation with other assets, maintaining its value during a financial crunch. Plus, with the appreciating gold price investing in this precious metal can aid in portfolio diversification.
However, gold investment has evolved significantly over the years. Purchasing physical gold coins or ornaments is no longer the only way to invest. With options like mutual funds, sovereign bonds and ETFs, you can start your investment from the comfort of your home.
Undeniably, starting is the most challenging part. So, stay with us as we cover the crux of gold as an investment and discuss the fundamentals of investing, benefits and the available options!
You can start gold investment in India by buying physical gold in the form of bars, jewellery, or gold coins, or look towards digital gold.
The alternative to physical gold is the digital equivalent. Instead of directly buying and storing gold ornaments, here’s how to invest in gold:
Digital gold is a viable option if you want to avoid spending additional money on storing physical assets.
You might often end up asking – is gold a good investment?
The answer is yes. While traditional investment avenues like shares and mutual funds depend on corporate results and the economic conditions worldwide, gold fluctuates on the principle of demand and supply.
That said, here are some of the reasons that make gold a great investment option:
The soaring prices during inflation reduce the value of any local currency. However, gold maintains its performance at this time due to its intrinsic value and limited supply. As such, the price of gold increases drastically during inflation, helping early investors acquire profits and make up for the potential losses in other investments.
If you decide to sell all your gold today, there's a high chance that you might find a buyer within a few hours. Plus, you can avail of loans against your gold if you are in immediate need of funds.
During the pandemic, gold was one of the few asset classes that did not experience a downward trend. On the contrary, August 2020 experienced the highest rates, with gold valued at INR ₹56,200. It continues to display strong performance in India, with 25% of the global buyers residing in the country.
Gold investment is easier with Fi, if you are leaning towards digital gold. Choose the mutual funds feature on Fi Money and invest commission-free in multiple gold mutual funds. Boasting over 800 mutual funds and an intuitive user interface, Fi Money is ideal for novice and seasoned investors alike. Fi is 100% secure, as it operates under EpiFi Wealth, a SEBI-validated investment advisor. Set up automatic payments per day, week or month at the touch of a button and pay zero penalties for missed payments!
Making a gold investment in India is a great way to safeguard yourself against potential losses during inflation. The value of gold appreciates in value during this period and acts as a hedge against inflation.
In the spirit of portfolio diversification, it is a good idea to dedicate 5% to 10% of your total investment to gold and related instruments.
If you view gold purely from an investment standpoint, investing in digital gold through mutual funds, ETFs, and sovereign bonds is better than purchasing physical assets.
Beginners can start by dedicating a small part of their investment to digital gold. By relying on SIPs to gold-related mutual funds and ETFs, you can gradually understand the market and make more informed choices.
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