Celebrate This Akshay Tritiya With Investments In Gold Online

Today is Akshaya Tritiya - that time of the year for many of us to buy gold. It’s believed to be an auspicious day to start new ventures as well. And because Akshaya Tritiya comes in the middle of the wedding season that is upon us already, most of us have our trips planned to local jewelers.

But buying gold costs money and its prices go up and down, just like any other asset. Typically, we always suggest to be a bit cautious in buying gold to ensure you don’t go overboard (we Indians love our gold, do we not?). The good news is, this Akshay Tritiya might just be a good occasion to buy gold. 

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Does that mean you should go out and buy as much gold as possible? Not really. Gold has been on a sideways move for past five years in rupee terms, keep aside some quick moves that remain short-lived. 

Gold prices remained subdued because US economy remained on the path of economic growth and US stocks kept on making new highs over past decade. The rub-off effect was seen worldwide and as a result the safe haven demand for gold deteriorated. But gold prices rally primarily in turbulent times, experts say.

Should you invest in gold this Akshaya Tritriya?

For gold, as an asset, to do well, you need to get your entry and exits right. Just like any other asset class. A safer way, therefore, to benefit from your investments is to follow an asset allocation approach. Ascertain how much risk you are comfortable in taking and then allocate in equity, debt and gold.

“Investments in gold should be restricted to 5% to 10% of the overall portfolio.

Gold ETF, gold funds investing in gold ETF and sovereign gold bonds (SGB) passively track the prices of gold. You need a demat account to invest in gold ETF.

SGB are issued by Reserve Bank of India on behalf of the government from time-to-time. SGB though has a tenure of eight years, there is a lock-in of five years. However, if you hold them in demat form, then they can be traded on the stock exchange.

SGB also pays interest at the rate of 2.5% per year. SGB suffer a lot because of low liquidity on the exchange and one buying into them should be prepared to hold on to them till maturity.

If you are considering exposure to gold as a part of long-term asset allocation, SGB are the best option.