Why is Gold a Smart Investment

Introduction

Gold has many attributes in our society. It is a ubiquitous piece of attractive metal known to represent affluence and prestige. Thus, you will come across people wearing gold for weddings or saving it for their marriage as a symbol of prosperity. It is also known to hold families for generations together culturally. You will find your grandparents or parents saving their gold to pass it on to the next generation. It bears traditional significance and sentimental value.

However, despite its deeply rooted cultural and traditional aspects, gold is also one of the most preferred types of investment amidst stocks, bonds, mutual funds, etc. Gold investment is considered an ally in urgent times of need. It can be quickly sold in the market where you can realize the total potential value of your investment. You will find people usually resort to selling their valuable gold in times of grave financial crisis. 

Why is gold a smart investment?

Besides its safety concerns, gold investment is regarded as an intelligent investment. That is because, unlike other investments, prices of gold are not adversely affected when the stock market falls. The price of gold is inversely connected to the stock market. Hence, gold prices shoot up when the stock market falls. It is the only investment that comes to the rescue of its investors in times of grave financial crisis when the stock market is in turmoil. Therefore, it is wise that you invest in gold along with other investments.

Is investing in gold safe?

Many safety concerns revolve around this question. Possession of physical hold, albeit a sign of high social standing, gives rise to the question of safety. Incidents of threats and robbery in the past have led people to believe that possession of physical gold isn’t safe anymore. However, there are various alternatives to it –in the form of the gold investment plan, where you can invest money in gold safely. Let us learn about some of these modern methods. It will also help you wisely plan your gold investment, also ensuring the safety of your asset.

Methods to Invest In Gold –  Gold Investment Plan

In recent times, there have been various methods of investing in gold online such as Gold ETFs, Sovereign Gold Bonds, digital gold and, Gold mutual funds. Thus, you can now invest in gold online without having to worry about storage and security.

• Gold ETFs:  Gold Exchange Traded Funds (ETFs) can help you invest in gold digitally. You need to open a Demat account for trading in Gold ETFs, which will enable you to hold them in a paperless form. Gold ETFs be used to hedge protection against a fluctuating market.

• Sovereign Gold Bonds (SGBs): In 2015, the government launched the Sovereign Gold Bond Scheme as an alternative to buying gold in its physical form. Under the SGB scheme, you can buy gold in the form of a digital certificate issued by RBI. It is thus, regarded as the safest method of purchasing digital gold.

• Gold mutual funds: Gold mutual funds are open-ended mutual funds, traded in units of ETFs. To invest in gold funds, you need not open a Demat account. They can be directly purchased from the fund house. In gold funds, you can start with a low investment amount through SIPs. The benefit of Gold funds is that they are not affected by changes in gold prices.

Additional Read: Why Invest in Sovereign Gold Bonds?

Conclusion

With modern methods such as the above, you can make gold a smart investment. Due to its high liquidity and ability to beat against inflation and hedge fluctuations in the market, gold is still regarded as high in investment. It is relied upon by people in their harshest of times.

Additional Read: Why Gold is the Perfect Investment for You This Diwali

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730) and BSE Ltd (Member Code :103) and having SEBI registration no. INZ000183631. Investment in securities market are subject to market risks, read all the related documents carefully before investing. We are distributors of loan products, Insurance and Mutual funds, Corporate Fixed Deposits, NCDs, PMS and AIF products. ICICI Securities Ltd. acts as a referral agent to various banks for various loan facilities and is subject to fulfilment of eligibility criteria, terms and conditions etc. All disputes with respect to the distribution / referral activity would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.