Gold has been one of the favorite investment options for Indians. But, not many are aware of the multiple options available to invest in Gold apart from the traditional physical gold.
The multiple options to invest in Gold can be in the form of Gold ETF, Digital Gold, Gold Sovereign Bond Schemes, Gold Mutual Funds, Gold Coins etc. Some investment options give the advantage to convert your digital investments into physical gold.
Unlike physical gold, investment in gold schemes is cost efficient as it does not involve any making charges. The cost is low and it requires minimum investment. This means you can invest any amount according to your convenience.
Also, interest is earned on the invested money. Investing in gold helps in beating inflation.
Also, gold investments are inversely proportional to equity investments. If the equity markets go down, gold prices go up. So, keeping gold investment in your portfolio will help to lessen the volatility. Investing in gold helps to preserve wealth.
When we consider investment in Gold Mutual Funds, one also gets the advantage of investing via SIP (Systematic Investment Plan) option. Apart from this, the funds are actively managed by the fund managers. Changes in gold prices in the market does not affect the prices of gold funds directly. As, you get the benefit of diversification. This means your money is getting invested in multiple gold companies.
Gold sovereign bonds are the safest way to invest in gold as they are issued by the Reserve Bank of India on behalf of the government with an assured interest. They have a tenor of 8 years with an option to exit from fifth year onwards. So, you get ownership of gold without physical possession.