Is this the Right Time to Invest In GOLD?
GOLD has been an integral part of our Lives and we INDIANS share a special bond with GOLD as long ago Gold was perceived to be God's Money then further down the line it translated to be a Symbol of Power and Status and nowadays we have GOLD as a reliable Store of Value. Long story Short we Love Gold in India and even if it is a small amount we all like to own some. Investing in Gold has also seen some changes from the likes of Physical Gold to nowadays Digital Gold but the underlying sentiment remains the same. But you should ask yourself
WHAT MAKES GOLD ATTRACTIVE?
If I have to say my reasons then it would most certainly be because of the Store of Wealth which has been Historically proven, the next would be the fact that GOLD is highly Liquid which means if you go to a shop with some Gold there is almost a 100 percent certainty you will be able to sell that GOLD. Diversification of my Portfolio is also a point that I consider when I buy GOLD and last but certainly not least GOLD serves as a good Hedge against INFLATION. So yeah plenty of reasons to Invest in GOLD.
AVENUES OF GOLD INVESTING
As I said before there are several avenues by which you can Invest in Gold. The most common one would be to Invest in Physical Gold which I tend to stay away from as it does incur some extra charges like Making Fees and other stuff. Next, we have Sovereign Gold Bonds which are Gold Bonds secured by the Government and it even gives a slight Interest on the amount you invest, and the cherry on the Cake is that the amount Invested is Tax-Free. Personally, I have yet to invest in any Sovereign Gold Bonds but in the future, I will most definitely invest in one. The next avenue is something that I like and Invest in which is Digital Gold as it gives me a lot of Flexibility on my Investment schedule. For example, I can automate things so that I buy 100 INR worth of Gold every Single Day which makes it easier for me to Invest plus I get the Dollar Cost Average going on since it's not in any Physical Format do not incur any Making Charges. There is also the option of Investing in GOLD ETF but truth be told I am not so well versed in that area so I start away from that as of now.
IS THIS THE RIGHT TIME TO BUY GOLD?
After all his discussion the question that I talked about remains unanswered, so let's answer that. According to me if you are someone who has not INvested in GOLD at all then I believe you should Buy some GOLD as this will certainly bring some Diversification in your portfolio but if you are someone like me who has exposure to GOLD then you need to Calculate the percentage of allocation you have in GOLD and if its around 10 percent than you are good, but of its below 10 then you might want to buy some GOLD to increase your GOLD holdings in your Portfolio.
You should also consider the fact that return on GOLD is around the 6 percent mark which barely meets Inflation but in the Long Run, this will most certainly beat Inflation, plus GOLD is like a Hedge against Volatility and usually when the Equity Market seems unsure like the situation now Gold market goes up as people take out Money from Equity and some of them prefer buying Gold at that TIME.