Gold-The best Hedge for all Seasons.






All that Glitters is Not Gold. If you say so! 
Gold has the best Glitter! Accept it or not. Gold has evolved over centuries as not only a means of Barter or Jewellery, but as a measure of wealth. For this yellow shiny metal the Human Race is always in pursuit of it.  For common people Gold is precious. For rich people Gold is still precious... Gold is gold... Everyone value gold as the measure of wealth. In economics point of view, Gold is the Metal or Commodity which nations keep reserve which may be directly proportional or indirectly proportional to the Cash Flow  / wealth distributed currencies in their country used my it's citizens for daily way of life, there by controlling the market within their power of the Central controlling authorities of finances of each Nations. Each and every nation in this world may be directly or indirectly benefitted by Gold. 

Gold can be stored in various shapes and sizes.. But there comes a new type of gold.. Yes! That's Paper gold!( Not the gold which you used to consume in Michelin Star Restaurants as Desserts ... ) but this is the gold which one can invest in and the agency providing the services will purchase gold and store it in our name in their vault or the vault of a controlling agency. As price of gold has gone upscale a few dips has had happened in the course of time. War, famine, flood, any unexpected natural disasters in a big scale has kept the Entire markets of equity, commodity , bullion in check... Gold always is a best Hedge.. 

Now let us see how a common man can Invest in gold. There are ways... Few may be. 

1. Physical Gold. 
     This can be either Jewellery, coins, bars/biscuits. The thing is we have to make sure this doesn't get stolen and has to be stored with utmost care. In a vault of bank (vault rental charges has to be bourne by the owner of gold) or home vault which has great security by the way. 

2. Digital Gold. 

    Gold can be purchased on digital platforms. There are several all over the world. One can register with their bank details and e mail and phone number. Then purchase amount of gold in digital format. When ever you need to sell it you can do at click of the smartphone at the market price of gold on that day. 

3. Paper Gold. 

    Gold can be purchased through Government bonds like Sovereign gold bonds. The purchaser will be given the certificate or bond by the Government itself. There may be a locking period for this Sovereign Gold Bond issued by Govt. Only after expiry of the Lock in period a user may be able to sell the Bond on that current day price of gold when he/she wishes.  The government rises funds for its economy via these bonds or money market instruments. So they may provide the Holder of the gold Bond a small interest returns apart from the Hedge of Gold one gets after lockin period. 

Gold can also be purchased/ investments through Stock market viz  Gold ETFs, SOVEREIGN GOLD BONDS. 

Many organizations Public and private in the share market do have Gold ETFs. 

Examples: HDFC Gold ETF, Nippon Gold ETF, ICICI GOLD ETF, SBI GOLD ETF, etc. They can be traded like stocks of a company in market timings. 

Pros & Cons:

Physical gold can be seen and it's grandeur can be felt by us, but problem of theft and other physical reactions which may affect gold are problems which one faces while in physical possession of Gold. Physical gold making into various items will coat more than the value of gold. Like Making Charges, Taxes, etc. 

Digital gold is good but one has to make sure that the Firm in which one has invested Digital Gold must be legit or the progression of the firm. 

ETFs on the other hand have great potential. 
Commonly ETFs have small expense ratios       ( cost to maintain the ETFs ) . Compared to taxes and making charges the expenses for GOLD ETF in a share market is very very minimal. Thus making this type of Paper gold ETFs great instruments for investing in gold with minimal expense, minimal or less maintenance charges. 

ETFs are hot cakes which one has to invest in order to grow wealth. At the end of the day all we need is wealth. 
As times evolve decades into the share markets all over the world, investing in gold has never stopped. 

We must choose carefully in what type of gold one has to invest for great wealth. 

All weather Investing for  a single Commodity- GOLD. 

GOLD IS ALWAYS A BEST HEDGE! 

Comments

Popular posts from this blog

Money at age 5

Computer Lab- A teenage Sensation.

Malai Cham Cham Recipe- Bengali Sweet