Investors can invest in gold in many ways. Any increase in the price of gold is entirely based on the recognition that when we sell it, a buyer will give a higher price. But, in fact, it is not necessary to always be the same. If you talk about investing in gold, the investment return in the last 10 years has been 8.3 percent. Modern recognition says that investing in gold is the same as investing in another commodity. Let's know how to invest in gold in this article.
1. Liquidity: Liquidity is the ability of a property to convert into cash easily, which is an important aspect of investment. If one wants the liquidity of their gold investments, gold ETFs are the best option, followed by physical gold in second place. Although sovereign gold bonds (SGBs) are better in other cases, the picture is somewhat clearer due to the minimum fixed lock-in period of 8 years.
2. Security: Investment security is also a major concern, especially when you are thinking of investing in gold, and its relevance increases. Sovereign Gold Bond is the best option from a security point of view, followed by gold ETFs even better. This is because, unlike physical gold, he is digitally credited to the investor's Demat account. Therefore, the risk of theft or fraud is eliminated.
3. Expected returns: Every investor wants him to get better returns from where he invests. Sovereign gold bonds offer higher returns, with additional interest of 2.5% per annum in addition to gold price returns.
4. Storage Cost: Also has to pay storage cost for gold. As expected, SGB and gold ETFs feature very convenient and risk-free storage at a nominal cost compared to physical gold, as they are credited electronically to the Demat account.
5. Purity: Purity is the most essential thing in the case of precious metals like gold. Physical gold should always be purchased from a trusted dealer to reduce the risk of fraud and the quality/quality of gold purchased. Purity is better.
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