Buying Physical Gold: It is the most traditional and preferred way
of investing in the precious metal. There are two ways to invest in physical
gold:
- Jewellery
a. Popular, easy to invest with cash or cheque
b. Involves making charges which are not recoverable during sale
c. Concerns of purity and also has the risk of theft
- Bars, Coins & Biscuits
a. Lucrative
investment option popular as savings for marriages
b. Comes
with a tamper proof cover and hence, has better re-sale value
c. Can
be purchased from banks and jewelers but cannot be sold back to bank
Exchange Traded
Funds: ETF basically is like any other stock traded on the stock market and
just as a stock has a company behind them ETF is backed by the asset gold. With
a demat Account one can invest in Gold ETF units, which are typically equivalent
to one gram gold.
- Advantage of high liquidity minus the hassle of stocking gold. It involves fee for the investment called brokerage.
- Attracts less taxation during the long term capital gain arising out of its sale if it is held for a year as compared to physical gold which needs a holding period of 03 years.
Mutual Fund Schemes:
These are conceptually similar to any mutual fund, however here the investor’s
money is invested into gold. One can invest in these mutual funds wither as a lump-sum or through the SIP route.
- Investment possible through systematic monthly payment without any demat account
- It is investing in the mutual fund scheme investing in Gold ETF
- Although, there are no requirements of demat account, there are Fund Management charges, and charges of the underlying scheme
Gold Future: Another
way to invest in gold through commodity exchanges, though a little riskier. The
purchase is done for future at price determined today, assuming it is going to
rise at that point of time.
- Recommended for those with high appetite for risk & sound knowledge of the market
E-Gold: Here you invest in gold online. One needs to
have a demat account with authorized company registered with NSEL for trading
online.
- Offers better liquidity and the option of taking physical delivery of gold
Read the first edition of Gold – A Smart Investment Option (Part I)
Silver Gold Bull is your reputable precious metals dealer. They will provide you with competitive, real-time prices and make sure that your precious metals are delivered to your door discreetly and fully insured.
ReplyDelete