One of the tools required for fulfilling the purpose behind the financial investment is allowing people to multiply their savings.
While speaking of gold, we can say that it is one of the oldest forms of currency used on earth. Not just our ancestors used gold centuries ago but we are using it which shows how the position of gold is held in India.
Gold is been respected all over the globe and valued for its rich history. Many people want to hold gold for many reasons. With innovations, gold trading has turned from physical gold to virtual trading. Though, every kind of gold is equally attractive for making investments.
Why make an investment in gold?
1. Easy to Liquidate
One of the primary reasons while making any kind of financial investment is considering it as a backup in case you need urgent support in future. Unlike many other financial tools, gold is a form of investment tool that can be liquidated easily and is regarded as a hard asset. In case you require quick money in future, all you have to do is sell your gold to meet your ends. There are gold buyers readily available in the market. Though, you must keep in mind that the return rate of gold is never fixed and might increase or decrease as per market conditions.
You May Like: Sovereign Gold Bond: A Look At What It Is, Pros and Cons
2. Hedge Against Inflation
It has been tested variously that gold act as a solid shield against inflation. Most of the times, gold rates remain unaffected during inflations and thus, you may not have to suffer losses even during inflations or when the country’s economic condition decreases due to global market affects. In the Indian context, although the value of rupee has not been performing well since the past few months, making an investment in gold is not a bad idea at all.
3. Wealth Creation
We know that gold is a precious metal. As mentioned earlier in this blog, gold is considered special in the hearts of Indians and thus can be considered as a wealth of a family. For instance, gold jewellery is passed on to the generations in the form of legacy and as a family wealth symbol.
4. Tangible Resource
Have you ever made an investment in real estate or any other financial investment scheme? If yes, you must be knowing that buying gold is much easier than other investment mediums. It is always safer for the people who show an interest in investing in less riskier schemes like making an investment in gold.
5. Gold investors can never go bankrupt
While buying a bar of physical gold, you do not have to make any paper contract. No middleman or third-party contract or contractual obligations are required to make investments in gold. Gold is the only investment options where simultaneously no other party is liable. This makes gold a powerful tool and a strong entry in your financial investment portfolio when things start going against you in your country’s economic conditions.
Things you must consider before making an investment in gold
1. Poor returns on physical gold
Return rates of physical gold are never fixed particularly when you make an investment in gold in the form of jewellery. This is because gold jewellery includes making charges besides other impurities mixed in pure gold that depreciates the true value of gold.
2. Safety issues with physical gold storage
Storing gold has always been a matter of concern particularly during the uncertain times when burglary and snatching have increased. Likewise, gold becomes vulnerable to theft like any other thing present in our house. Therefore, investors require to be more cautious for their asset that is in the form of physical gold. Many investors rather make investments in gold through ETF and gold mutual fund. However, they too remain prone to cybersecurity threats.
3. Gold is not a source of steady income
People make a financial investment so that they can arrange a steady source of income for post-retirement and their children. Gold can never provide you with continuous profit which will flow into your pockets. You buy gold at once just like you have to sell it at once.
If your investment motive is not limited to wealth creation and leave a legacy for your future generations, gold proves to be one of the most effective forms of the physical asset. To make investments in gold, you can choose from various options available in the market such as Gold funds or equity bonds. For new investors, the gold fund would be rather a simple process and prove safer than a physical asset. Lastly, never make an investment in gold if you seek a continuous source of income as it can be liquidated only once.