It is a common phenomenon among the Indians to invest in gold but often, a lot of people fail to understand why gold is not the only ideal investment. Over the past few years, gold has failed to give good returns or may have given negative returns to the investors.
Every kind of investment comes with risks, but gold has not given any major reason why it is an ideal investment. Undoubtedly, it does generate returns as noted during the Lehman Brothers crisis, when investors dumped shares to buy gold. Investors depend on gold only at the times of uncertainty in the business sector all over the world. However, they do dump it the very moment the economy recovers and this can be noted in the current situations as well this is precisely the conditions that are prevailing now. A person can invest in gold depending on their need. However, rate of the yellow metal is related with the need and changes in the international bullion market.
1) Gold Jewellery
A lot of market experts suggest that it is really not suggested to buy gold jewellery as an investment. When we buy jewellery we also pay making charges and wastage charges to the jeweler. Based on the design of the jewellery, the making charges can go up. 22 karat quality gold is used in making jewelries and when you sell it, the jeweler does not consider the making charge or wastage.
2) Gold Exchange Traded Funds (ETF)
Gold ETFs may be a little more expensive than physical gold because of the inclusion of management fees charged by the particular fund house. Also, one might be subjected to brokerage, which could increase the price of a unit of the ETF.
3) Gold Coin
Investing money in gold coins and bars is yet another loss because every time you sell from it you will get a lesser amount. Moreover, banks do not buyback the gold bars and coins once it is sold.
4) No steady income
Gold is an asset which fails to give any regular income, on the other hand investments made in mutual funds, real estate and stocks would pay you dividends and rents.
5) Price set by international markets
A lot of investors do not know the fact that Indian gold prices are subject to change depending on the international market. Any major fluctuations internationally will affect Indian prices as well. Dollar plays a vital role in gold prices.