Gold! The only thing apart from cricket that the entire country loves unanimously. It is no secret that Indians love gold. It makes absolute sense if you wish to buy physical gold for personal consumption. You may want to gift a gold necklace to your spouse or your mother. There is no other option but to go to a jewelry store and buy physical gold at such times.
But when it comes to investments, it may be better to invest in a mutual fund instead of gold.
Mutual funds are a great way to invest for the future and earn high returns. They are prevalent among investors who are interested in wealth management. There are lots of different options for you to consider. You can invest in debt, equity, or even a mix of both.
Saving for the future is one of the biggest reasons why people invest in different avenues. If you wish to invest for long-term goals such as financing your son’s education or marriage, it is better to invest in mutual funds than gold. This is because mutual funds tend to offer much higher returns than gold in the long term.
Long-term returns on gold can be as low as 10% per annum. In comparison, mutual funds can offer anywhere between 10-15% per annum. But if you wish to invest in gold, you can do so by investing in gold Exchange Traded Funds (ETFs).
Normally, if you have to invest in gold, you would have to buy physical gold in the form of gold bars or gold coins. This can be a cumbersome process since you also need to consider factors such as safety and storage. There is a high risk of loss or theft when it comes to physical gold. And then, there is the question of quality too. But through gold ETFs, you don’t need to worry about all these factors.
Gold ETFs are mutual fund schemes that are open-ended. When you invest in an ETF, there are other investors just like you doing so. The money is collected and invested in standard gold bullion. Now, this gold is 99.5% pure. So, there is no question of purity issues there.
When you invest in gold ETFs, you don’t need to worry about issues such as loss, theft, or locker charges. This is because your investment is stored in electronic form in your demat account. All your transactions are recorded systematically. There is no chance of your gold getting stolen from here.
Ease of investing
Gold ETFs are traded on the stock market just like shares. This means you can buy and sell units of an ETF whenever you wish (that is, when the stock exchanges are open) and from any part of the country. And the best part is you don’t need huge sums of money to invest in gold. You can start investing with as little as 1 gm of gold!
Gold is generally considered to be a safe investment option to hedge against inflation. But when it comes to future goals, you might want to consider investing in mutual funds since the returns tend to be higher in the long term.