TYPES OF INVESTING IN GOLD
In this blog we will talking about gold investing you know that gold is best investing thing people invest in this to become rich i will give you information type of gold investing read complete articles.
Jewellery investing
Jewellery is a very easy way for people to start investing in gold. But there are a few problem in jewellery and a few advantages as well let's talk about the advantages and disadvantages of jewellery investing.
Advantages and disadvantages of jewellery.
Advantages:
1. You can use the jewellery. So it won't be just an investment, you can wear it at weeding and parties.
Disadvantages:
1. When ever you buy gold in the form of jewellery. You have to give about 10% making charges, which is for the jeweller for making the jewellery. This doesn't go to works the investment. This is something that you pay over and above the price of gold, so the jewellery can only be used as a display what it won't grow as an investment.
2. Whenever you buy jewellery, you have to pay 3% GST and if you do not have a GST input, then this is also an expense for you.
3. If you buy a lot of gold in the form of jewellery, then you will have to store it somewhere, so you take a bank's locker, or have a safe in the house, or if you have a lot of jewellery then you will have to keep guards and that is another expense. So buy making this investment you of course build a social image but there a lot of expense attached.
4. Biggest disadvantages is around purity it self, if your jeweller isn't your family jeweller then are they giving you pure gold or Hallmark gold? You are not sure and that is always a question mark.
That's why my suggestion would be if you want to invest in gold then please do not listen to your mother, your wife, your girlfriend, or your sister and don't invest through jewellery please go a head but not in the form of investment.
Physical gold investing
Instead of buying jewellery you can buy actual gold bars and that is far better because you don't have to give any making charges.
Advantages and disadvantages of physical gold:
Advantages:
1.No making charges
2. Purity gold
It is 100 or 99% pure.
3. Quality assured by Hallmark.
So if you are buying it from a reputed place. You will have the assurance of quality there.
Disadvantages:
1. Payment of 3% GST.
The only expense is 3% GST which you will have to pay in case you do not have a GST input.
2. Inconvenience of storage.
The expense of storage because you have bars and coins all of them required storage.
So it is an easy way of investing but may be not the smartest way of investing.
Digital gold investing
So there are a lot of platforms that give you the option to buy digital gold, which mean you will not have gold in your physical possession but it would be digital like money in your wallet, or frankly, just as you have very less money with yourself in cash. But it is stored digitally in your bank account and then you make UPI payment, so NEFT make your payment use your credit card through that so all of that is digital money and the same way there is digital gold as well.
For Example: If you want to buy digital gold. Tanshiq sells digital gold. You can buy digital gold from Paytm. Jar is an app where it converts your savings to it's nearest ten and invests the excess amount in digital gold so these are the ways through which you can buy digital gold.
Disadvantages and advantages of digital gold.
Disadvantages:
1. Payment of 3% GST.
There is a GST on the cost so again you have to pay a 3% GST.
2. Platform commission.
Platform also want to make money so there is a difference between the buying and selling prices of gold. So you do not get gold on the actual price of gold in the market it is around 5 - 6% higher so that is the additional cost you have to bear for buying digital gold.
Advantages:
1. Purity guaranteed.
The best thing it is purity guaranteed because it is digital in nature.
2. No storage needed.
There is no storage charge and you don't have to store anywhere so there is no fear of theft.
3. Liquidity.
You can sell it at any point in time.
4. Invest even with a small amount of money.
You can start buying digital gold with a very small amount. I think as low as 100$ or 500$ which is almost like a mutual funds.
So if you want to invest in gold and if you digital gold every month whether for 500$, 600$, 1000$, 1500$, 2000$, 5000$ you can do all of that by paying existing price of gold and you don't have to own the gold physically it is all parked in some digital account of yours.
ETFs investing
There are a lot of ETFs in gold that are listed in the stock market you must have a demat account then you can buy any ETFs.
For Example: these are all the gold ETFs that I have got from Moneycontrol along with market cap. It seems that the gold ETFs of Invesco is the biggest again, this is not a recommendation, so don't treat it like that and this moves as the gold price moves. So it's not like you are buying gold, you are buying a traded fund pegged to gold which is listed to the stock market as the gold price is increases or decreases the fund value also increases and decreases and accordingly, your gold investments gets translated into a stock market instrument which is called ETFs.
Advantages and disadvantages of ETFs.
Disadvantages:
1. ETFs charges 0.5%.
The cost of ETFs is quite low so it is typically between 0.5% - 0.6% of your total investment. If you are making an investment of 100$ then 99.5$ will be spent on buying actual gold and only 0.5$ on 100$ average will be spent on the maintenance of the ETFs which will be their expense for thier livelihood.
2. Not touch the Gold.
So it is a really good way of doing it. But it doesn't show any physical nature of gold, so if you want to touch the Gold or smell it then this will not be the thing.
Advantages:
1. Purity is guaranteed.
2. Liquidity is brilliant.
You can buy or sell it whenever you want on the open days of the stock market.
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