Gold has been a popular investment choice for centuries, offering potential diversification, inflation protection, and a safe haven during economic uncertainty. There are several ways to invest in gold, each with its own advantages and disadvantages.

Asset Allocation: 

Gold as has been discussed was discussed as an asset class only after the 2008 recession, when for the first time it made sense in allocation. 

Any person investing in Gold should understand few things 

1. The maximum allocation of gold should be 10-15% 
2. Gold is to be used as a hedge not as a primary tool for wealth creation, that would always be equity. 
3. Gold bought for jewellery purposes is not considered as investment. 

How to invest in Gold ? 

Physical Gold : 

A person can buy coins, bars etc.

Storage :  You have to store the physical gold in a safe locker or place at home. 

Risk : Risk of theft and burglary.

Cost : Cost of actual buying and additional cost if you are storing it in a safe place. 

Liquidity : High can be sold to the jeweller anytime.

Sovereign Gold bonds:

are government securities denominated in gold. They are issued by the Reserve Bank of India (RBI) on behalf of the Government of India. These bonds offer a unique opportunity to invest in gold without the physical risks associated with holding gold bullion with maturity of 7 years and cab be reddemed after 5 years. 

Get interest payment every year of 2.5% .

Storage : No storage required . can be in demat or any other form 

Risk : No risk as backed by the government of India.

Taxation : They were tax free on maturity. 

Liquidity : Bit low since it was not you cannot sell it to government but can trade online.

But since last tranche in the month of february the government has not issued any bonds and it seem they won’t issue any more bonds in future( this is still not known)

Gold ETF : 

is a gold exchange-traded fund (ETF) that tracks the price of domestic physical gold in India. It offers a convenient and efficient way to invest in gold without the need to purchase and store physical gold. 

Storage : The ETF is stored in dematerialised format so you do not have to worry on the storage of physical gold.You need a demat account

Risk : Risk of burglary is zero. 

Cost : You have to bear the management expenses and brokerage fees. Also since it was bought on stock exchange so you have to look at the price you are buying. 

Liquidity : Highly liquid can be sold on stock exchange.

Gold funds :

Gold funds are mutual funds that invest primarily in gold or gold-related securities. Offer investors a convenient and diversified way to participate in the gold market without the need to purchase and store physical gold.

Storage : The gold fund units are allocated to the person buying them , Demat account is not necessary . 

Risk : Risk of burglary is zero. 

Cost : The fund manager expenses are borne by the customer. 

Liquidity: Highly liquid as can be sold back to MF company.

Taxation : 

Another important discussion is on the taxation . With the new tax regime in place the taxation has improved , and it makes a stronger case for you to invest in this asset class. 

Source: India Budget. *Surcharge and Health & Education Cess as applicable. In view of the individual nature of the tax consequences, each investor is advised to consult his/ her own professional tax advisor.

Top Fund list : 

How have the fund performed so far.

we have considered SIP returns for this fund and looked at the top performing fund. We over the last few year the GOLD has given returns in comparison to the equity investment.

Conclusion :

To check weather, the gold investing make any sense to your diversification you can look at the asset allocation.

Contact us to know what is that you need rather than just falling prey to wrong plans. You can reach us : https://wa.me/message/LC5W5ZNTPSJ5L1)