Investing in Gold is a habit of Indians, no other country hoards Gold the way us Indians do. As a child I never understood the importance of doing so, until I joined bank and started learning more about Investments and Hedge Funds that I realized the value of investing in Gold. India is world’s largest importer of Gold with about $62,000 Million worth of Gold imported in the previous year.
However, Gold is not just a metal for Indians. Gold holds an auspicious value in our hearts and our culture. Traditionally, Indians buy the highest amount of Gold in the marriage season or on Pushya Nakshatra Day as well as on Akshaya Tritya and Dhanteras. I remember my parents bought the highest amount of Gold in their life at the time of both their daughter’s marriage. I have received some amount of Gold from my relatives and family in my marriage as well. In fact, so many relatives buy Gold as a future investment for the bride & groom.
When the world was busy exchanging grains for grains, Egyptians started making jewelry out of Gold in the 3000 BC. However, it wasn’t until 550 or 560 BC that the world started to make currency out of Gold. Since then Gold’s importance grew. More countries especially the Greek & the Romans started using Gold in their currency. The Great Britain came up with Silver, Gold and mixed metal coins in early 1066. Indians were already using Silver & Gold coins produced by different King’s mints until India came under British Rule and many of them stopped. Afterwards, The British Banking system was implied in India of which Reserve Bank of India Est. 1934, still plays a huge role in Indian Economy as the National Reserve of India.
So, WHY GO INVESTING IN GOLD? IS IT A GOOD OPTION?
As a teenager I always had a question or two for my mom-dad when they bought Gold. Because let’s be frank, most of that gold ended up deep in some locker, to see daylight again only on Dhanteras. “Why do we buy gold, if you are going to keep it closed in locker?” I feel like apologizing to my mom-dad for the same now. Understanding how Gold can help you as a Hedge is very important. I think I am going to teach my child investment by the time it forms in my uterus so they grow up better investor then I.
GOLD Doesn’t always give High returns.
First of all understand that Gold is better a Hedge instead of an investment. Gold is not a good option if you want returns as early as 10 years. Gold is a long-term investment. During economic growth people rarely invest in Gold which helps in bringing Gold’s returns and Global value down. However, Gold preserves WEALTH.
God is a Hedge and It PRESERVES Wealth.
Gold is a good backup to rely on when the markets go down. Wise investors never invest all their money in one place. That is why having about 10% of your funds backed up as Gold can help you during economic downturns. After all, Gold preserves Wealth. How you will ask?
If you lived in early 1980’s and you buy Gold worth $40 or Rs. 1330.00 it would be worth more than the amount if you had just saved the $40 or Rs. 1330.00. If you bought 10 gm Gold worth Rs.1330.00 in 1980 it is worth more than Rs.29,667.06. The value of Rs.1330.00 grew to Rs.29,667.06. Maybe the overall increase doesn’t seem much, but it’s market value can give a boost to your Investor portfolio.
Gold is good fight against inflation. The price of money i.e. buying power decreases a lot during inflation, during such times having Gold in preserve can help you survive. As an investor it is important to understand that an economic turn can come any moment like the 2008 crash. During such times the money loses its power or all power in soft investments & you may need to turn to your hard investments.
Gold is a good Diversification.
At the end of the day your worry is how to keep yourself safe when living in today’s haywire economical times. A political war between two countries can bring its residents under so much tension. For Example, Africa or Middle East. You never know when a war will be waged between two countries. At times Gold can help escape political boarders.
How To Buy Gold. Or Best Ways To Investing in Gold.
- Gold Jewelry
- Gold Coins or Bars
- Virtual Gold (Gold Bonds) – Comes with special Tax features.
- Gold ETF
- Gold Mutual Funds
- Invest directly in Gold Companies
All kinds of investments comes with its own Risks and Advantages. To have physical Gold or Soft Gold is ones choice. No time is good or bad to invest in Gold. Depending on the Global Market Gold prices vary. Yes, when market prices go down buying is a good option i.e. when Gold is less expensive. These days you can buy Gold online from the convenience of your home.