Traditionally considered a sign of supremacy, beauty and peace, gold holds immense religious value especially in Indian culture and connotes great sacred meaning. Indians, in particular, are of the belief that buying gold would bring them good fortune.
However, with the changing times, the connotation and worth of the metal has undergone remarkable changes. People’s perception towards the precious yellow metal has taken a very different dimension. Now, gold is being considered a smart investment option.
As an investment option, it has gained notable acceptance all over the world in the last few years. As a result, it has become the most popular investment option among all the metals. While physical buying of gold continues to be the most popular form of gold investment, the investments going into gold exchange traded funds is also going up.
There are a number of investment vehicles for gold such as bars, coins, exchange traded products, certificates, accounts etc. The most traditional way of investing in gold is by buying bullion gold bars. Gold coins are also a common way of owning gold. Likewise, other vehicles equally are common investment options people opt for.
Today, investors have plenty of options available to them. Those who are interested in purchasing gold in physical form, buy it from jewellers, banks or accumulate the metal through monthly schemes offered by jewellers. Those who want to accumulate paper gold, choose exchange traded funds (ETFs) dedicated to gold or open-ended gold savings funds.
While many investors go for buying physical gold from local jewellers, experts are of the view that this perhaps may not be an efficient way to invest in gold. There are possibilities that jewellers may levy mark-up over the market prices. These apart, there are issues like purity and storage/safe-keeping. Quite a lot of experts recommend accumulating gold in electronic form also known as e-gold.
This means, one can buy gold through mutual funds. Mutual funds are well regulated and there are no issues of purity and storage. If an investor has broking and demat account, he/she can buy gold units through ETF route. If he/she does not have a demat account, investing through a gold savings fund offered by most fund houses would be a good step.
The true worth of the precious yellow metal is inescapable by the virtue of being one of the safest investment avenues available. As a matter of fact, even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in the world.
Despite the spiraling prices, the precious yellow metal has not lost its luster and hence several financial planners believe that investment in gold (physical or e-gold) is a smart decision by an individual to be taken and that it should be part of every investment portfolio. While the former offers greater psychological satisfaction to the investor, the latter provides better returns and is more tax-efficient. However, both options carry more or less the same risks and rewards.