Continuing the discussion from What is really a good time to buy Gold?:
So with so many apps offering a new way to buy gold, there is now (I know it already exists) a 100th way of buying/investing in the gold market in India: Sovereign gold bond, Gold ETFs, Gold futures, Digital gold and ofc the classic physical gold.
And now the question, which is the best way considering liquidity and safety into consideration.
Would love to hear the thoughts of this community.
Gold is not an asset for wealth creation, rather it is an insurance or could be used for social requirement. It doesnt appreciate. Returns in 30-40 years have been ~8% and that too, are inflation related!
Agreed with @Raghav
I invest in Digital gold (since I can later obtain the physical form and are liquid) and would advise you to not have it more than 15% of your portfolio.
For those who are having a dmat account gold ETF is better than gold fund. The gold fund is invested in gold ETF and a very very small percentage is invested in other funds. When you invest in gold fund they deduct about 0.1 percent as additional fee. In both the funds deductions are made at the rate of expence ratio applicable to any mutual fund.
I agree GOLD ETF are best assets if you are buying for investment purpose and liquidity is one of the criteria. Low fees and instant liquidity
Depends your end goal. Do you have the capacity to hold till SGBs mature?
If you don’t intend to liquidate your gold holdings for 8 years, SGB might work for you . Liquidity in secondary market should be a concern for you only if you want to transact in the secondary markets. In fact, SGB gives you the benefit of not just tracking gold prices without having to hold physical gold, but also receiving additional coupon of 2+% annually (based on the issue price.)