Market Secrets Investment Series-Investing in Gold
Importance of Investing in Gold
- Portfolio diversification
- Longest living currency ever
- All central banks still holds gold
- Limited availability
Different ways of investing in Gold
- Physical Gold
- Gold Futures in Commodities market
- Gold ETF
- Gold Mutual Funds
- Sovereign Gold Bonds
Investing in Physical Gold
Pros:
- No Lock-in Period
- No Paper work
Cons:
- Additional making charges
- Risk of theft
- Storage costs
- Tax(GST) on buying and selling
- Capital Gains tax on returns
Investing in Gold Futures
Pros:
- No Paper work, completely online
- No Demat charges
- No Lock-in period
Cons:
- Futures contract – Have to buy & sell each month
- Transaction charges are high, suitable for trading & not investing
Investing in Gold ETF
Pros:
- No Paper work, completely online
- No Lock-in period
- No storage cost, no fear of theft
- No frequent transaction cost
Cons:
- Transaction charges are still high if you are going to accumulate in small quantities each month, suitable for trading & not investing
- Should have a demat account
Investing in Gold MF: Big No
- Gold MF invests either in Gold Mining companies (not in actual gold) or it invests in Gold ETFs.
- Either way, it is not suitable as an investment vehicle.
Investing in SGB – Preferred
Pros:
- Govt backed – 100% safety
- No storage cost, no fear of theft
- Low transaction charges
- 50 rupees per gram discount from current market price
- No making charges
- Capital Gains are tax-free
- In addition to capital gains, yields 2.5% interest on the investment which is bonus
Cons:
- 5 Year lock-in (with maturity at 8 years) – but shouldn’t trouble investors
- Issued: Every few months in tranches, you can opt to buy from secondary market
Investing in SGB – How to?
SGB Current issue:
- FY2019 – Series-II – 15th to 19th October, 2018
- FY2019 – Series-III – 5th to 9th November, 2018
- FY2019 – Series-IV – 24th to 28th December, 2018
- FY2019 – Series-V – 14th to 18th January, 2019
- FY2019 – Series-VI – 4th to 8th February, 2019
Where to buy?:
- Easy way is through existing brokers
- You can buy from banks & post offices as well
- Easy way? It is just one click with zerodha
We have explained about this in detail in the video:
https://youtu.be/1Be9X4J7mgI
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