Gold

Are you of the opinion that investing in gold is the best thing happened to mankind after the slice of bread? If yes, then you are right. Gone are the days, when gold was recognized as an object to beatify, bought out of emotional touch, today gold holds a potential to help you grow your wealth.

With uncertainty looming all around, adding gold into investment portfolio has become imperative. Confused holding gold in what form whether physical, paper or electronic would be prudent for you when you need to accumulate funds over turbulent times? Find out what the other forms of gold are? What benefits all other types of funds holds? Why not to invest in conventional form of gold? And lots more.

In contrast to other asset classes such as equities known for deriving their value from underlying business, real estate, which provide rental yields along with a potential for capital appreciation, and lastly debt which pays regular interest, gold possess no such distinctive characteristic.

Listed here are some of the ways of investing in Gold:

Physical gold: Investing in gold the conventional way

Quite often, many of us prefer investing in gold the conventional way or physical form. Physical form that includes jewelry, coins and bars that brings with it an emotional appeal, contentment, credibility and tangibility factor.

Furthermore, physical gold market is quite easy to understand. Simply walk into shop, buy coins, and keep it in safety secure box.

Right from known as conventional methods of investing in physical gold, saying it too suffer from drawbacks would not be wrong at all.

Ideally, buying physical gold serve as a good investment tool for those who are little apprehensive about losing control of gold.

Why not to go for physical gold?

Buying and holding gold in a physical form will constitute some kind of cost and that would be locker rent that you have to pay to protect from theft or burglary.

The value depreciates as selling price will always be lower than the market price. Thus, if you buy a certain amount of gold from your jeweler and sell the same piece of gold to another then the quality will always be questioned.

Pay higher premium that ranges from 5% to 10% to acquire your gold.

Holding physical gold levy a tax liability and you will be axed by wealth tax on the total value of gold holdings.

If the above mentioned aforementioned cons have made you jittery and set you in a fix to rethink about your physical gold holdings then you can try out some of the unconventional ways of investing in gold. Such investment involves:

Gold ETFs (Gold Exchange Traded Funds)

Known as a smarter option over any other form of gold, Gold ETFs are traded as well as listed on a stock exchange listed and traded in NSE or BSE at any point of time. No longer, you have to worry about safety, security and out of fad related anxieties prevalent in physical gold. Know why?

Gold ETFs funds can be purchased in small quantities on the basis of future requirements say for marriage purpose.

No risk of theft, burglary and security cost as everything would be in de-mat or paper form.

Gold ETFs can be best sold at transparent prices across India. Neither its value depreciates nor did questioning relate to purity, quality and resale value affect. You need not to pay wealth tax, suitable option for HNIs and much more.

Gold Fund of Funds:

If financial experts are to be believed both gold ETFs and gold funds are mutual fund products, only the mode of purchase differs.

The major attraction of gold fund of funds is that it does not ask for demat account. Unlike gold ETFs one can invest without a demat account.

• An investor holds the option to enrol both the ways SIP or STP. As it comes with the benefits of investing a fixed amount of money in sailing highs and lows of gold.
• The minimum investment it requires is 5,000.
• The fund manager shoulders the entire responsibility of transactions on behalf of investors
• Lastly, gold funds help you take the benefits of rupee cost averaging principle through a systematic investment plan.

NSEL’s e-gold/e-silver: Going the e-way

E-gold turning out to be the most favoured way of investing in gold is launched by the National Spot Exchange Limited represents unique way to invest in gold in electronic form. Taking into consideration the secular uptrend in gold that hit hard on the pockets of buyers, E-gold allows you to buy gold in smaller denomination such as 1,213 grams.

The primary advantage of going for gold the e-way is that you’ll do away with the physical holding of gold and for that you need not to hold cost thereto. The only cost which you have to incur is the cost of maintaining a demat account and trading account with a broker.

The ease to sell any number of units, hence you can sell any number of units in the secondary market on a real-time basis. Further, this helps saving you from encountering horrendous experience, which remains prevalent during times when you sale gold in a physical form.