We even own precious pieces of jewellery that has been passed on to us from generations. We have festivals like Dhanteras when buying gold is considered auspicious. Moreover, gold is a liquid asset which means that you can easily sell it and encash anytime you want. Now that you have decided to buy Gold, let us explore various options that you can invest in gold.
Gold Exchange Traded Funds (ETFs)
Investing in Gold ETFs right can make you rich. Gold ETFs are basically open-ended mutual fund schemes. These schemes invest the money collected from investors in standard gold bullion (0.995 purity). You can say that these schemes are designed to keep a close track of returns from physical gold in the spot market. If you decide to invest in Gold ETF, you buy and redeem the units either directly from the mutual fund or from the stock exchange.
Physical Gold (Gold Coins and Jewellery)
Probably the simplest way of investing. You can buy gold coins, jewellery, or other ornaments and keep them with you physically. You can even buy gold bars if you are thinking of investing big. One thing that cannot be denied is that nothing can give you the security and assurance of owning physical gold. Physical gold is ideally suited to investors who are looking for a mid to long term investment. It acts as a security of their savings against unpredictable changes in the economic climate. Moreover, it will always have a value. It can increase or decrease over time, but it will never lose its value completely. A precaution here to take is, before buying gold coins or bars; you should check the quality and reputation of the seller from whom you are buying it. If you’re wondering where are you going to put all that physical gold, here are some ideas:
Private storage of gold, e.g., at home
Storage of gold in safe deposit boxes
Storage of gold in professional vaults
Gold Mutual Funds (GMFs)
Some people might be hesitant in investing in physical gold for many reasons. It can be their paranoia or they may not have safe space to keep their precious investment. For such people, investing in Gold mutual funds is a reasonable idea. Mutual funds invest in Gold ETFs on behalf of you. The difference between Gold Mutual Funds and Gold ETFs is that you need to open demat account and pay broking charges for Gold ETFs. In GMFs you just have to bear the additional charges charged by the Gold Fund of Fund. If you are thinking of buying less quantity, gold mutual funds is a good idea, otherwise ETFs are good as you can negotiate for lesser brokerage charges from your stock broker.
Now that you know about the most common ways of investing in gold, what are you waiting for? Go for any way from the above mentioned directions and start investing! Also, don’t forget t consult all the options with your family as it is considered auspicious to involve family in Gold matters. Afterall, gold is not just an asset, it’s a shiny feeling.