Here are four possible investment options in Gold
- Jewellery
Most popular and easy to buy, this is the most inefficient gold investment. When you buy jewels you not only pay for the gold, but also pay making charges and the manufacturing wastages incurred by the gold smith, besides the taxes. Also, jewellery is normally made out of less pure and the deteriorating quality of the gold. Another concern is that physical gold requires security (greater risk).
- Gold coins / Gold biscuits
Available with many banks like ICICI, BoI, SBI etc for sale with a premium of about 10% in sealed packages. It is certified by the authority and hence there is no worry about the purity. You may be able to sell them back to the bank or any other trader at the prevailing market price with no premium of course. Security concern is also applicable in this case.
- Gold funds
Mutual funds invest in commodity gold / related industry scripts. This is an indirect paper trade similar to any other mutual fund. You buy units of Rs.10 each and the fund will invest in companies who are into gold and related commodities. There is no need to monitor the gold price (the fund manager's headache!) with a service cost of about 6 %.
- Exchange traded funds - Gold BEES / Kotak BEES
This is the best bet for a cost effective investment. Gold Bees is listed in the stock exchanges (like any other stock) and traded on a daily basis. It tracks the gold price closely within a margin of +/- 1 %. The advantage of this fund is the liquidity (lots of buying and selling) of the asset, so you can buy or sell the gold in units of 1 gram. Pre-requisite is that you may need a Demat and trading account with a broker. No hassles about the purity of the gold or the wastages involved!
Investment in Real Estate, NEXT WEEK.
0 comments:
Post a Comment