Investment in Gold is one of the oldest investments which is popular till date. And when its Diwali buying gold even adds more significance to it. Gold! The shiny yellow-coloured metal is used in ornaments and previously was a form of currency. Gold has unique qualities such as it doesn’t rust or corrode and it conducts both heat and electricity.
The price of gold is determined by the 24-hour market fluctuations. The gold trades are much influenced by sentiments than the ratio of demand and supply. For example, in India, gold prices seem to inflate during the festive season and marriage season.
If you are planning to invest in gold and wondering if it is a good option, this article will help you to make your decision. So, let’s start:
Why Invest in Gold?
Gold is a popular investment option for several reasons. Here are the most common ones
Retains Value. Though the price of gold fluctuates, even if the price of gold decreases, the underlying value of gold does not change much.
Use Of Gold For Other Products. Gold jewellery is famous all over the world, this is one of the reasons that it will never become outdated and has much significance. Being a good conductor of heat and electricity Gold is also being used in electric items. This ensures that there is a constant demand that further stabilizes the price of gold.
Diversification. Diversifying your investment portfolio is always advised, and investing in gold helps you in doing this. This is suggested because investing in other profiles may or may not give your good returns and it’s also possible that you are in a loss. But if you invest in gold you are not in a loss for sure. So, it’s a type of risk management.
Conversion. Gold can be easily converted into cash anywhere in the world. It’s almost synonymous to cash and is easily recognized for its value.
Increase in LTV ratio: Also, gold loan providers surged after RBI decided to increase the permissible loan to value ratio (LTV) for gold loans to 90% from 75%. This has also made gold loans favourable for those who are financially hit by the COVID-19 pandemic and are looking for funds to meet their requirements.
With the lockdown now being lifted, the gold loan industry is expecting an increase in the demand for gold loans as the majority of people are looking for liquid cash and working capital to push their businesses which are hit by the lockdown due to the corona crisis.
Returns: Investment in gold is quite safe though it does not pay any dividends. However, the best you can do while investing in gold is to track the gold price regularly and sell it at the highest price. The returns you get are surely not low from what you get when investing in mutual funds or equities.
https://amritaagarwalblog.wordpress.com/2020/09/22/common-investment-myths-busted/
Hope this article will help you decide whether to buy Gold this Diwali or not? However, seeing the benefits it seems quite safe and a good deal to bring happiness home and secure your future at the same time.