Global production has been declining steadily, with the Covid-19 epidemic disrupting global markets. After that, the returns from most of the asset classes have gone down. Investors concerned by the market scenario are turning to gold, which always emerges as a reserve of stable prices in crisis times, especially when other asset classes are volatile.
Why should you invest in gold?
Gold has all the qualities that a traditional investor sees in an asset class.
For example:
Returns: Gold prices have seen a decline at times, but it always returns strongly, even leaving behind outperforming bonds and stocks for some time.
Liquidity: You can convert investing in gold into cash quite easily if needed.
Lack of co-relation: Gold is known to perform differently from other asset classes such as stocks and bonds. When they go down, gold can go up.
Due to the low correlation from other assets, gold acts as an excellent portfolio diversifier, which reduces losses during adverse market conditions. The price of gold is also rooted in its qualities of beating inflation. At the time of economic slowdown, governments increase their power to print unlimited money. If there is a lot of money in the economy, there is inflation, which reduces the value of money in people's pockets and property. The price of gold increases during that period. If you've made up your mind about investing in gold, here are five ways:
Investing in physical gold:
Gold coins, bars, and jewelry can buy gold physically. However, Indians prefer gold jewelry, but the things that should be taken care of before shopping are safety, insurance costs, and old designs. Making charges, which rang from 6% to 25% of the cost of gold in India. On the other hand, gold coins, jewelers, e-commerce websites, non-banking financial companies, and the government can be purchased. The Government of India has launched indigenous minted coins, which have been the Ashok Chakra on one side and the image of Mahatma Gandhi on the other.
Investment in ETF (Exchange Traded Funds):
The best way to invest in paper gold is to buy gold ETFs. Since investing in ETFs does not involve high initial buying, insurance, and even sales costs, it is very cost-effective. People need a trading account from an online stock broker and Demat account to invest in ETFs. Once the account is created, it is only a matter of choosing gold ETFs and placing orders from the broker's trading portal.
Investment in GAP (Gold Accumulation Plan):
Gold can also be purchased online through mobile wallets like Google Pay, Paytm, Fonpe under the gold rush plan of Stock Holding Corporation of India. These options for buying ' digital gold ' are given either in collaboration with MMTC-PAMP or Safegold or both. Digital gold can be redeemed as physical gold or resold to the seller.
Investing in SGB (Sovereign Gold Bonds):
This is another way of investing in paper gold. The government releases SGB, which are available to buy during certain intervals every few months and are tax-free on redemption. The Government of India has launched the Gold Monetization Scheme on 5th November 2015 to provide a way for the public to earn interest on gold lying idle in bank lockers.
Investing in Gold Futures:
Investment in gold futures is actually estimated at the price of gold, and the purpose of investing in it is to profit from price volatility. If gold moves in the required direction, one can earn money very quickly in the futures market. But, if that does not happen, they can also lose money in a short time.
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