Advantage Gold! Balancing your investment portfolio with an insulated asset
Gold is treasured by Indian families not only as a symbol of prosperity but also as a means that can offer unconditional security during lean times. This core idea motivates potential investors to bank upon the priceless metal as a prospective investment option since times immemorial.
Well, the common notion that suggests, owning substantial amount of gold can turn tables if capitalized at the right juncture, cannot be ruled out at all. But, bearing a rational outlook towards the risks and rewards is definitely recommended.
Venturing in gold boasts plethora of advantages making it one of the most valued elements possessed by an individual. Let us take a tour around the myriad prospects invariably associated with gold investments.
Now that we know that the metal can prove to be lucrative in terms of investment, let's review the scope beyond physical gold.
- Gold has been noted to be ever appreciating marked by negligible volatility in comparison to other assets. The gold market has been recorded to be almost insulated against the unpredictability of the capital market i.e. inflation or deflation, thereby encouraging investments in its favor
- Gold boasts of a universal acclaim and its natural attribute does not vary with location. Thus, can be used for trading across the globe when the time is ripe. This liquidity factor makes it a promising investment alternative.
- During the period of inflation, investors are affected by the depreciating stocks or debt funds. In such cases gold has emerged victorious in terms of its performance over the years.
- Any judicious investor diversifies his investment portfolio in order to to secure performance of his assets. Here gold becomes a potential diversifying element considering its steady review against depreciating stock movements.
- Gold investments are not subject to paper contracts or contractual obligations, involving any third party and is the sole liability of an individual.
- Quite a few specialists have been heard saying, Gold never loses its intrinsic value. History has witnessed the ever growing demand for this ever appreciating metal across the globe, often termed as the only global currency.
- Physical gold holding can be kept absolutely confidential as of now unlike most other investments, thus, is beyond the taxation slab. (Although, lately, this has lead to a debate demanding a predefined limit on the possession of gold).
- Funny but true, Gold investments are termed as tactile- a jargon for tangible in common parlance. Something that can be touched, felt or designed for personal use.
It is definitely a reasonable concern that physical form of the metal is prone to depreciation or loss in terms of theft or converting it into jewelry, as quite prevalent in India. In order to address investor sentiment and preserve the popularity of gold, Gold ETFs were introduced. This particular form of gold does not demand whooping investments, starting at just 500 through regular SIP in Gold FoFs. It might not seem to be worthwhile in the beginning, but, ensures immense growth potential in the long run.
Gold ETFs flaunt tax benefits and is conferred to be a non-equity. Defined by long term capital gains, one can expect to capitalize on the tax benefit after a yearlong investment. Gold fund can be redeemed as and when required.
Often the nature, attribute and value of gold and its ownership affect us psychologically; instilling in us a sense of confidence and making us feel powerful. Why not! After all it can serve as the only financial insurance on the eve of a range of personal, social, economic or political tragedies, supporting us in a way that no other investment alternatives can!