Benifit of gold investment.

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Gold is one of the popular investment in India. If we it according to annual value of investment then it rank on second position after real estate. 

If we talk about lat 1 - 1.5 years then gold has given a good return up to 25 - 30% as compare two stock market so it indicates that gold might be a good investment. 

On the other hand it's said that gold is not a productive asset. Infect Warren Buffett said that gold is not a income productive asset. 

A confusion arises that which is right and which is wrong. 

Let's understand that gold is which type of investment. 

Gold is a (commodity) means it is not an income producing asset. If we compare it from other asset like real estate or other there is a type of rent give to us as an income. 

Now question arrise that if gold is not an income producing asset so how it's value increase or decrease ? 

Change in the value is because of increase or decrease in demand and supply. 

For example:- If gold is constantly in demand then it's price goes up and if it's not then it's price goes down. 

How can we buy gold? 
There are two huge cases for gold. 
1) For consumption. 
-If you make jewelries of the the gold then making charges are included so price of gold will decrease. 
- You have to store it in bank locker that take cost. 
-Impunity is mixed in that so the price will automatically decrease. 

Gold as a jewelry is not an investment so put it aside. 
2) Gold Investment. 
We can buy gold as an investment. 
•Physical gold- This gold is not a jewelry because here you can buy it as a coin or biskites. 

•Exchange traded funds- Here ETF itself invest in it asan stock then value is decided of that fund . 
But before investing you must have a demat account. 

•Gold mutual funds-These are the funds of fund. They invest in ETF. 

•Sovereign Gold Bonds- RBI issue the phones in which you can invest. 

Let's take a look between the chart of gold vs stocks. 
As on 30 jun 2020

Yeras            Sensex return           gold return
5                             5%                             13%
10                           7%                             10%
20                           10%                           13%
30                           13%                           10%

By watching this data  we can say that gold might perform better for long time period. 

Before investigating in it one should must take a look at previous years graph 📈 . 

Let's watch an annual return of gold nad nifty. 
By observing this pattern we can say that when there is crisis in economy or when ever stock market goes down the gold rate increases. 

1) Return-For long term there is average return of 8-10%.

2) Risks- Moderate risk. 

3) liquidity- High. 

4) Volatility- Moderate. 
If you have any questions related to this you can ask in comment section. 


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