is gold a good investment in a volatile market? - gold jewellery set
Over time, the return of gold is only consistent with or below the inflation rate, and there is a big fluctuation in the market.
In this case, it is easy for people to panic and worry about their investment.
Most people try to find the safest way to park and start evaluating the pros and cons of stocks, mutual funds, gold and real estate.
Rather than worrying about the return on investment and the safe path, focus on achieving personal financial goals.
The best way to overcome market volatility is to targetBased on investment.
Reasons for the goal
The reason why basic investment is so successful is mainly because when you set a specific goal, you put emotions in the process and try to save money to achieve the goal.
Also, since the process takes into account your risk appetite and time frame, the investment advice you receive is best suited to help you meet your needs.
So those who invest for the goal end up being more successful in their investment efforts.
Therefore, when you invest in order to achieve your goals, the volatility of the market will not affect you.
When planning your investment, you should not only focus on financial goals, but also be aware of the advantages and disadvantages of different investment channels.
In times of market volatility, people often tend to invest in gold when assessing various investment channels to replace stocks.
Gold has long been seen as a safe form of investment.
So far, the Indian people have been investing heavily in gold, the biggest consumer of gold.
Every Indian family has been exposed to gold in the form of coins or jewelry.
Most people have the following view on gold, "buying gold jewelry is a sign of my wealth and I can easily liquidate it when needed.
The price of gold has been rising, so buying gold is an investment ".
While this argument was correct a few years ago, gold was the investment we had to keep in mind when the market fluctuated --
In the ever-changing financial world, we cannot evaluate it based on the previous performance of the asset class.
Gold prices have run well so far, and most people buy gold to own physical assets, which gives them some security.
The investment in gold also gave them a good return.
However, things have changed over time and the return on gold is only in line with or below the inflation rate.
Another major issue related to gold is liquidity. Gold has socio-
For most Indians, economic and emotional value is found to be very difficult to sell gold when needed.
In times of uncertainty, this is not the main motivation to buy gold to use gold.
This negates the whole purpose of buying gold when it is uncertain.
In addition to safety and storage, the main drawback of owning gold jewelry is that when selling gold beads, the owner lost a lot of money when melting the jewelry, the money that is eventually obtained is much less than the price of buying jewelry.
In short, the resale value of gold has declined due to the cost of jewelry "crushing.
People can't forget that there is also a high charge for buying jewelry.
Gold investment will not provide any current income such as dividends or rents like stocks or real estate, and investors can get a return on investment without selling assets.
Therefore, in the current situation, it is wise not to invest in gold, taking into account the above shortcomings of investing in gold.
There are three ways gold is held in India-jewelry, gold coins or gold bars and gold exchange trading funds (ETFs).
Although most Indians hold gold in the form of jewelry, it is better not to invest in gold.
As far as personal consumption is concerned, you can buy gold jewelry, but if you want to invest in gold or accumulate gold for your child's marriage, he/she should choose either a gold ETF or a gold mutual fund.
Therefore, when the market fluctuates, one must focus only on his/her goals, rather than assessing the various investment channels and supervising the shortcomings of investing in gold and real estate.
Gold and real estate should not be seen as alternative investment models.
Keeping in mind that the financial goals and timelines for achieving these goals should be the only thing that matters during periods of volatility.