You Need to Worry: Gold Prices on an All Time High!

Gold may be a glittering investment opportunity on account of a sustained upward spiral in prices, but the meteoric ascent has brought tears to many families in Kerala, where gifting ornaments to brides for their marriage is a common practice.

With gold breaching the Rs 20,000-mark for a sovereign recently, market figures show there has been no let-up in retail buying, as gold is an integral part of marriage, cutting across caste and community divides in Kerala.

According to market leaders, an average of 60-70 tonnes of gold is sold annually in the state, contributing around Rs 200 crore (Rs 2 billion) to the state exchequer in tax.

"We see many touching scenes these days like parents of prospective brides breaking into tears at jewel shops finding their plans and calculations going awry," a source confirmed.

On the other hand, market statistics show that the soaring prices have made the metal a reliable investment option for the rich.

The steady march of gold price has raised investors' interests in the precious metal. The number of people seeing gold as a safe investment option is increasing.

The investors prefer coins, 24-carat biscuits and pure gold bars over ornaments.
Gold crossed the Rs 10,000 per kg mark in October, 2008, after which it has continued to gain ground, with its value almost doubling in three years.

"The demand for gold coins and bars is at an all-time high in the Kerala market.

"This shows the number of people considering gold as a better investment option has gone up.
Traders have come out with strategies to ensure that the increasing prices do not dent demand.

Major jewellers in the state have launched schemes like 'advance booking', which offer delivery of gold at a future date at the prevailing rate on the day of booking.

The recent developments in the US economy and problems in the euro zone are the major reasons for the spurt in gold prices.

Cases of parents becoming bankrupt and even being driven to suicide after running into an inextricable debt trap have also been reported.

"We fear the present gold price hike will add to the woes of the parents of girl children in the state,"is a cause of concern for all.

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Source: http://www.rediff.com/business/slide-show

Optimstic Investors - Indians!

Indians are still the most optimistic investors in Asia mainly because of its sustained domestic growth momentum, but going into 2011, they have somewhat lower expectations than they did in the previous quarters, says a survey.

The quarterly Investor Dashboard Sentiment survey by global financial services group shows that amongst the ten Asia Pacific markets included in the survey, India is at 161 (a 11 point fall from Q2 2010) continues to lead the region and manages to sustain very optimistic sentiment.

High inflation rate continued to hurt the Indian economy. Besides, there is a decrease in sentiments, especially in terms of past three months economic indicators - economic situation, return on investments, personal and household financial situations, the survey said.

Indian investors' expectations for the quarter ahead are little lower owing to the increasing inflationary pressure in the economy, falling of investment quantum and concerns that interest rates will rise further, the report added.

Asia investors (ex-Japan) are positive about their local economies despite remaining cautious of economic recovery in the US.

Besides, concerns about the impact of the Euro zone debt crisis looms large on the horizon as investors across Asia are optimistic that a double-dip recession is unlikely and Asian markets are possibly decoupling from the global markets, the study said.

Source: http://www.rediff.com/business
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Invest in Some Interesting Tangible Assets

Instability in the financial markets is encouraging investors to look for alternative methods of investment. Some of the most popular alternative investments are Investments in art, stamps, gold, other commodities, wine, toys and books.

Investing in Art: Art is being incorporated into the investor’s overall asset allocation decision. There are many ways of investing in art via Auctions, Online auctions, Art gallery and Online portals. A few things an investor must look into:

• Art buyers should gain as much knowledge as possible of the artist’s work, the quality, provenance, condition and period in which it was painted before investing.
• Have a clear idea about the time horizon and gestation period for a particular work to appreciate in value.
• If an investor is looking for quick returns, he must buy works of well-known artists. If you like a less famous artist’s work and are prepared to wait, your returns might grow majorly over a period of time.
• Buy art only if you like the quality of work and not just the artist. Art requires careful maintenance.

Investing in Fine Wine: Fine Wine is another popular means of investment. Wine purchased as an investment is typically obtained from a reputable wine broker since wine houses do not generally sell directly to the public.

Advantages and Disadvantages of a Wine Investment: Being a physical commodity, it is not affected by the stock market, company bankruptcies, fraudulent activities, major market shifts or even poor management. Wine Investment provides legitimate ways of exemption from capital gains tax, VAT and import and export duties. Like other tangible investments, wine provides a good means to diversify a portfolio. Fine Wine increases in quality with time, hence its value continually increases.
There are several disadvantages: Wine Investment Market is difficult to understand and analyse. Wines are not always priced based on their value, but on the basis of their demand, which in turn is dependent on several unstable factors. In order to store and preserve wines, investors tend to incur sizeable expenses.

Investing in Gold: Gold is regarded as the safest type of investment as its value is not affected by inflation, unlike other assets. Due to the rapid growth of the world economy and the uneven rise of geopolitics, there is a lot of uncertainty involved regarding other modes of investments and hence most businessmen these days believe that gold, or the yellow metal as it is often referred to, is the safest bet when it comes to investing.

Advantages and Risks of investing in Gold: Apart from being the most basic type of saving, gold is also an integral part of religious and social tradition, especially in India. It is the primary metal used for ornaments. Gold is indestructible. It is advisable to buy gold in the form of gold bars or coins from approved dealers instead of jewellery. While selling ornaments, value is lost on making charges, waste removal and sales tax. It is not advisable to buy gold during wedding seasons or during festivals like Diwali. Also, when investing in a gold deposit scheme, one loses the making charges.

Source: http://loans.msn.bankbazaar.com/guide
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Think and Invest in Gold! How much gold should you buy?

Given that gold lends stability to the portfolio and acts as a hedge against inflation, it would always make sense to have some exposure to the metal. The question is, how much?

Although every individual's goals and needs will be different and, therefore, demand a suitable asset allocation strategy, experts believe the exposure to gold should be between 5% and 15% of the individual's portfolio. Swapnil Pawar, CIO, Karvy Private Wealth asserts, "It would be pointless to put less than 5% of the portfolio in gold while anything more than 15% would expose the investor to unnecessary risks."

Borrowing money to invest is never a good idea. Investors who take leveraged bets on gold may be taking a very high risk. If prices go down, you will be hit by a double whammy-the loss on gold as well as the interest payable on the loan.

Source: http://economictimes.indiatimes.com
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