The question that puts every investor in the dilemma of “is gold as an investment can give me the desired returns?” Plenty of asset classes, like stocks, mutual funds, ETFs, etc., can generate substantial returns, so investing in gold has its perks.
There are many benefits of gold investment, and in this blog, we will discuss why you should invest in gold.
5 reasons to invest in gold
Protection against inflation risks
Gold investment protects savings from currency depreciation over time, providing a hedge against inflation. In addition, investment in gold doesn’t deteriorate with time, which makes it an ideal choice for long-term investment.
Tax benefits
Gold investments, such as non-equity products like SBI Gold Fund, can have lower taxation or even tax exemptions, offering long-term capital gains and tax benefits. To get the complete picture of how to save tax on gold, read this article.
Stable and safe investment
Gold holds inherent value in the long run, remaining relatively unaffected during market crashes or pandemics, making it a preferred alternative to stocks and bonds.
High liquidity
Gold is easy to sell and recognised by jewellery dealers worldwide. You can use gold as a security against a loan, thus making gold a highly liquid form of asset.
Good returns and security
Traditionally people prefer investing in physical gold as it is a secure investment option. Moreover, with time, it appreciates in value, which offers consistent returns in the long run compared to other asset classes.
In conclusion, gold investment returns are par, if not worse, with other asset classes, thus making it a secure investment option. Moreover, it acts as a status symbol. Therefore, 15% of the overall investors are heavily invested in gold.
FAQs
Is it safe to buy gold in 2023?
Since inflation persists and the economy remains uncertain, experts say buying gold at a high price will not change anything. Gold prices will continue to soar, irrespective of inflation. Also, it presents an opportunity for investors to diversify their portfolio with an asset like gold to add stability to the portfolio.
What are the risks associated with physical gold?
Since physical gold is a finite commodity, risks such as theft, storage, making charges, and more will always loom. On the contrary, digital gold, like gold ETFs and Sovereign Gold Bonds, carries none of these risks.
Can I invest in gold online?Yes! You can invest in Sovereign Gold Bonds and Gold ETFs, where you receive electronic units representing physical gold upon investment.
As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.
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