How much gold should I buy? Will the money waste in case of inflation? These are some of the common questions associated with gold investment. Though the noble metal has been a go-to investment avenue for people from all walks of life, the usual sense of reluctance cannot be ignored. In an attempt to remove this, experts at Rajesh Exports, world’s largest gold processing company, share the common know-hows of gold:-
Gold is a timeless investment source. It is one of those rare elements that holds a sentimental as well as financial value and it doesn’t entirely dip with time. It’s meant for generations to last as a token of love, care, and respect. However, focusing on the investment part, the biggest reason is the answer to the money risk question asked in the beginning. Over a long period of time, if value of currency keeps decreasing, gold acts as a hedge against inflation.
In addition to the above, easy liquidation makes gold ideal for investments. It acts like a global currency and can be traded easily for cash at any jewelry store. Unlike real estate or automobiles, gold has no specific time period and return prices depend on quality, and current market price.
The noble metal has multiple market forms including jewelry, bars, coins, and Exchange Trade Fund
While this is the most preferred investment avenue, it faces discouragement due to additional charges. Experts at Rajesh Exports reveal that unlike their retail chain, Shubh Jewellers, making charges applied by other jewelers lead to a 15% cost increase on a single piece. However, large-scale companies like Rajesh Exports aim to provide their customers with value-for-money gold i.e. negligible additional costs.
- Bars and Coins
Another variety of physical gold, big investors invest in large gold bars because they are cheap in comparison to small ones. Simultaneously, liquidation becomes difficult due to their large size. On the other hand, coins are small in size, easy to sell, and available as per customer’s whims. However, according to the gold coin ‘spread’, an individual is subject to lose 6-9% on the returns of the same coin.
- Exchange Trade Fund (ETF)
ETFs are similar to mutual funds, where one unit represents 0.5g or 1g gold. It picked up traction amidst the masses due to exemption from wealth tax. While ETFs needs only one year to be termed under long-term capital gain, they can be converted into physical gold only if their size is above 500g.
Considering the long term aspects, market experts at Rajesh Exports suggest that it is ideal to invest maximum 10% of an individual’s assets in gold. In order to gain knowledge about paper trading, you need to research, thoroughly study the gold market, meet share market experts, and start investing small amounts in the beginning. As for physical gold, it purely depends upon the capacity of one’s capital.
In spite of all the discussions, gold is going to stay an investment source in the years to come and it is important that people start gathering adequate knowledge to make the best choices for their future.