Gold investment is one of the most preferred forms of investment, though, there are several points that one should consider as it is not an easy investment. Gold investments are of different types, however, the returns are not high, and therefore, it is not wise to invest. On the contrary, having nothing as an investment is risky.
Gold can be invested in the following ways.
Jewellery – It is one of the most common forms of investment. People prefer buying gold jewellery to be used sometimes later. The investment is considered over the price of gold in the market and the value of the ornament bought. Lower the price of gold in the market makes you buy more. However, the actual price of the ornament comes out to be much higher as the cost includes making charges of the ornament. When you think of reselling to some jeweller, he deducts the making and wastage charges and offers you as per the value of the gold in the market. Half of the profit is already gone in the deduction by the jeweller, as a result, reducing profit margins.
Gold coins – Some people invest by buying gold coins from the bank but that is also a bad investment idea as bank charges up to 10% premium on its coins. It also comes with a limitation that the bank doesn’t buy back its own coins.
Gold bars (bullion) – This is the best type of Gold as an Investment, however, a few people only do it as the minimum investment amount is quite high. Majority of the people cannot afford to buy gold bars for investment, therefore, this investment type isn’t much popular.
Gold ETFs – Gold Exchange Traded Funds (ETFs) is the most successful investment as it works like a mutual fund that only invests in gold. It is an easier and safer way to buy gold. The gold can be accessed electronically and the amount is low. The only drawback is that the gold you own or invest in cannot be seen.
Features of gold investment
Gold investment is not a good choice if you wish to invest for the purpose of capital appreciation. Gold investment doesn’t have much profit margin. Variation in gold prices is not highly marginal, therefore, the returns are also not high.
There are very few risk factors in case of gold, however, it is a kind of dead investment as it doesn’t fetch you bigger benefits. If you want an investment that you want to forget, then this is the right choice. There is no risk involved in this investment until and unless the gold prices really take a dip.
Gold investment is one of the most liquid forms of investment as you can get your gold asset converted to cash immediately, provided you approach the genuine person or place, who offers you the amount as per the market value. You can get other ornaments as well by giving your gold possession.
Gold is the respite at the time of inflation. It is one of the safest investment. Gold funds also fluctuate with the moving market. Earlier, people kept gold as a long-term investment but now with the gold funds in the market, people consider it to be a short-term investment.
Even though gold investments do not offer much of benefits yet people invest in it as it is a lifetime asset. If not beneficial it wouldn’t be a loss in any way. Therefore, everyone still finds gold investment as safe and investors are advised to invest in gold.