Gold is a precious metal and it is limited in quantity in the market. Gold is considered as good investment instrument. It always beats inflation in buying power. Gold price are increasing day by day and buying gold becomes costlier. In India, 50% gold purchased for personal ornaments such as marriage and festivals, 20% for investment, 20 for emergency need, 10% for gifting option. Plan to start your investment in gold. In the blog, why gold as an investment avenue for wealth creation and how to invest in gold online.
Physical gold is investment, usable ornaments and emergency fund.
Holding physical gold gives more advantage than digital gold such as Gold ETF or Gold mutual funds. In your financial planning, plan to buy 500 grams of gold as physical asset to get better gain from gold. Investment in gold can be done in 3 ways. As a physical form such as jewelry, coins or bars. Otherwise digital gold in Gold ETF and Gold mutual funds.
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- Gold ETF
- Gold mutual funds
- Physical Gold.
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Gold ETF:
Gold ETF is one of the way to buy digital gold. All of ETFs track the market price of gold and the returns would be in alignment with it. If gold price increases and demand increase, it would give better returns. But you can’t pledge the gold ETF in case of emergency. It is only for investment and it does not have advantage of pledging in case of emergency. Gold ETFs to invest in gold and are listed on the stock exchanges. So demat account is required to invest in Gold ETF.
Gold mutual funds:
Gold mutual funds invest in gold ETF and it does not require demat account to start gold mutual funds. You can start investing in gold mutual funds in SIP. For an investor, buying a gold fund is easier and convenient.
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- Nippon India Gold Saving Growth Direct Plan
- SBI Gold Growth Direct Plan
- HDFC Gold Growth Direct Plan
- Kotak Gold Growth Direct Plan
- ICICI Prudential Regular Gold Savings Fund (FOF)
Gold ETF vs Gold mutual funds:
1). Gold mutual funds invests in Gold ETF. But it allows to start with minimum in SIP.
2). Gold mutual funds are slightly costlier as it has expense ratio for managing the fund.
3). Gold mutual funds can be converted cash in case of emergency.
4). Gold mutual funds are easily accessible.
Gold as an investment:
As we said earlier, physical gold is more preferred than Gold ETF and gold mutual funds. But gold mutual funds can be used to accumulate money to buy physical gold. So how to plan and grow in your investment in gold.
1). Start one of the Gold mutual fund SIP
2). Invest 20% of your savings in gold mutual fund SIP
3). Once you accumulate money to buy more than 20 grams of gold, redeem the fund and buy physical gold.
Use gold mutual funds to accumulate money to buy physical gold. Follow the action plan to have 500 grams physical gold to become wealthy. Start gold investment today in gold mutual funds:)