Introduction of Best Ways to Invest in Gold
Don’t put your all eggs in one basket! Almost everybody has heard it in stock market free webinar or paid, but have you ever applied this quote in your investment portfolio?
Do you think that you’ll put your money in stock market and become rich? Markets also have a correction phase, apart from bull run. In market correction, almost every investor’s portfolio goes into red, so what’s the solution?
You would have thought that you have invested in fundamentally sound company after learning from stock market courses online free with certificate or paid, so you’re sorted. But in phase of market correction, you would desperately want to withdraw your investment and returns by selling partial portfolio. But is that really the best solution?
One of the better solutions as per stock market course in Noida, is to allocate your hard earned money to different asset classes in the portfolio. This concept is called Diversification. This means not to invest all your money into one asset class, i.e., equity. Now you will say that Goela, you only tell to invest into stock market, and we do. Then why you’re saying to invest into other assets too?
Our main motto is to let you know other asset classes also, so when the markets correct you can move your money there. Thus, today we will be discussing how can you deploy your hard earned money in other asset classes, other than stock market. In this blog, we will be discussing gold investment! Not that gold, which is apple of every Indian mother’s eye, we’ll be going discussing five asset classes you should look into before you invest into gold.
We as Indians love gold! Our country, India is the largest consumer of gold globally, with an overall 11% of the world’s total gold owned by Indian households. Gold is one of the safe havens at the time of crisis in the economy and your friend in need as per stock market courses in Chennai. So, let’s begin with different ways to invest in gold!
Physical Gold- A big No, No! If you’re thinking to buy it as an investment, then a huge NO!
- Sovereign Gold Bonds or SGBs: They’re issued by the RBI on behalf of the Indian government. Just like you buy real gold, you can buy SGBs, but this asset class can be bought in a certificate format. These bonds are regarded as one of the most profitable methods of investing in gold as an asset as per stock market paid course. SGBs are a great investment option for those who’re looking at making a lump sum, long-term investment into gold as an asset. It has a lock-in period of 5 years along with a maturity period of 8 years. It also provides an added interest income of 2.5% p.a. when one invests into it. It’s one of the cost-effective ways to add gold as a hedge into your portfolio. A few of the amazing benefits associated with investing in SGB are that it comes with no GST, no making charges, no risk of theft, and no insurance cost. Simply, all the disadvantages of having physical gold are flipped and become advantages of SGBs.
How do you apply for SGBs?
RBI issues SGBs in tranches entire year. You can apply for an SGB issue through discount brokers, brokers, or even online banking. But there is a catch! If you want to sell your SGB, then you’ve to sell it in the secondary market. However, chances are there that you might have to sell it at the current gold price, which might be lesser than your purchasing price. Though potential buyers are lesser in the secondary market for SGBs than sellers, the price you will get for it would not make it a profitable deal.
- Gold ETFs: These ETFs are listed and traded both on NSE as well as BSE just the way a stock of any company is traded. Gold ETFs invest in 99.5% pure gold and track the price of physical gold. These are ideal investments for those who are looking for both short-term and long-term investment/trade options as per best stock market courses in Delhi. They’re also a good investment option for those who are looking for an investment asset with easy liquidity as per best stock market courses in Delhi. One could easily sell their gold ETF units in the market with no entry and exit load charges.
How do you apply?
You can directly purchase them through your demat account. You can sell them anytime you need or choose to stay invested in them for the longer term. The process is the same as you buy or sell stocks of any company.
- Gold MFs: These mutual funds invest in gold, directly or indirectly. Gold MF invests into stocks of companies associated with mining and distribution of gold, physical gold, and gold ETFs. People can start investing into this asset with as minimum as Rs 100. Such investments are suitable for those who decide to make tiny investments into gold as per best stock market courses. As per stock market course in Noida, those who are looking for a way to invest in gold with no liquidity concerns, should also prefer this asset. Investors can also make regular investments into gold MFs with a periodic SIP. These investors benefit from the experience of professional fund managers who take key decisions of buying and selling to generate better returns. A fee is charged by the mutual fund as these funds are actively managed by such fund managers.
How do you apply for gold mutual funds?
You can apply for any gold MF via any mutual fund website or through any mediator or distributor.
- Digital gold plans: Digital gold plan is a convenient and economical way to accumulate people’s favourite, shiny, yellow metal. It enables investors to purchase, sell and hold pure gold in fractional quantity anytime and anywhere. Digital gold, issued by the state-owned MMTC (Metals and Minerals Trading Corporation of India), is associated with PAMP (Produits Artistiques Métaux Précieux), Switzerland. They are a global leader in branding bullion. One could invest in digital gold with as minimum as Re 1! Yes, you read it right, as low as 1 Re! It is an ideal investment asset for those who desire dual benefits of investment as well as the option to easily take physical delivery later as per top 5 Online Stock Market Courses in India. Investing in digital gold is like investing in physical gold. The only catch is that you’ll not be getting physical gold to possess. This offers a crystal clear advantage as one doesn’t have to worry about issues concerned with physical gold like purity, storage, making charges, wastage, and liquidity. Investors can invest in small amounts. However, as digital gold does not fall under the purview of any financial regulator, one needs to select the purchasing platform carefully. What makes digital gold special is the facility to get your holdings exchanged for physical gold, delivered at your doorstep.
How could you apply?
There are many platforms that provide digital gold as a product, but one must carefully analyse platforms and see if they’re registered under MMTC.
Tax Implication on gold:
The tax implications are generally same across various gold instruments. If any gold asset is held for less than 36 months, the tax to be paid for it will be as per the slab rates of the investor. On the contrary, if the gold asset is bought and held for more than 36 months, a flat 20% tax rate is charged with indexation benefits. This benefit means that inflation is adjusted in such a way that the returns aren’t impacted because of inflation. The tax in the latter case is to be paid with a surcharge (if applicable) and a cess of 4%. In SGBs only, the above-mentioned clause sustains if the asset is sold after five years but before eight years. Otherwise, the interest income is completely taxed, while the corpus received upon maturity is tax exempted.
Gold is considered as a hedge against inflation and currency as per best stock market courses in Delhi. So, one must invest into gold wisely and be a smart investor. Remember, diversification is necessary, but one should not overdiversify.
To summarize, if you are thinking to invest into gold, then above options available to you. Sovereign Gold Bonds (SGBs), Gold ETFs, Gold mutual funds, and digital gold plans offer diverse ways to allocate your money to this precious metal. With our blogs acting as stock market courses online free with certificate, each option comes with its own set of advantages, disadvantages and considerations.
As per any stock market paid course, it’s important to assess your investment and financial goals, risk tolerance, and duration for which you’ll remain invested before making any investment decision. Additionally, understanding the tax implications associated with gold investments is crucial to avoid any unpleasant surprises. Remember, gold serves as a hedge against inflation and currency fluctuations. Thus, it should be a part of a well-diversified investment portfolio. By diversifying your investments across different asset classes, such as stocks, bonds, real estate, and gold, you can minimize risks and potentially maximize returns.
Stay informed, keep learning, and make informed investment choices. As the saying goes, “Don’t put your all eggs in one basket.” Remember, knowledge and continuous learning through best stock market courses are key to staying ahead in the investment game. Invest wisely and may your investment journey be successful and rewarding. Happy investing!