This is one type assets which has been around for hundreds and thousand of years and has not lost value (not just lost but has increased in value). Here is the chart of last 20 years only, you will be surprised to see the growth in the value – 10 times!!!!!

Now, should you invest ?

If you still have a question, please look at the chart again and imagine, if you had invested 1 Lakh in 2002 then what would it worth today – 10 Lakhs.

Is there any other assets which gave such kind of return in last 20 years ?

Then even, if you need a reason, here it is – Gold is the best hedge against all other kind of Assets i.e. Investment in Stock market, Investment in Fixed deposits, Property etc. because when every asset class losses value then Gold gains in value (its considered as Safe investment).

So, you should always have gold as part of your portfolio.

Now, the key question is – how can you buy gold (you will be surprised with the options and difference) and what is the best way to buy gold.

Let me make an introduction to each way and then we will go through the comparison chart to find the best way-

1. Jewelry (like we have always been buying), it does not needs any introduction so lets move on to next one.

2. Gold coin , instead of buying a Jewelry, you just buy the gold as the coin. Advantage – Low making charges, in the range of 1-2% instead of 10% to 30% in Jewelry.

3. Bullion like gold piece or biscuit. Advantage – there is almost no making charge and its purest form of the gold which you can buy (among the best ways to buy gold!)

4. Digital Gold – You open an app like Paytm, Groww, Google Pay etc…..it has option to buy to gold starting very small denomination i.e. 100 rupees. You will not get physical gold (it is in digital form), it will just show in the app that you own gold worth X rupees. (one of the worst ways to buy gold!)

5. Sovereign Gold Bond (unique to India), SGB – It is a paper gold (you can get units in demat as well!) you buy from RBI, which comes with backing of government of India. Unique feature is that you get annual simple interest of 2.5% every year on the amount invested and if you atleast hold it for 5 Years there is no tax on the gain made. (It is the best way to buy gold!).

6. Exchange Traded Fund – It is a fund which mimics the change in the value of the gold, you can but it on stock exchange at any point of time and sell it at any point of time. You just need an account with any stock broking firm like Zerodha, Groww, etc

Let looks at few features of these products in comparison

How to buy	Jewelry	Gold Coin	Bullion	Digital Gold	SGB	ETF
Entry price	Low	Low	Medium	Very Low	Low	Very Low
Liquidity	Not so Liquid	Liquid	Liquid	Liquid	Not so Liquid	Liquid
Regulated	No	No	No	No	Yes	Yes
Physical Safety	High Risky	High Risky	High Risky	Low Risk	Low Risk	Low Risk
Income Stream	Low gain	Gain	Gain	Low Gain	Gain + Interest	Gain

In short – If you are thinking to buy gold for investment – Then invest in SGB as 1st option and Bullion/ Gold coin as 2nd option.

Please do not invest in digital gold, its the worst way of investment.

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