Can Gold Investment be Fruitful in the Long Run?

Gold is one of the most common commodities in which consumers put their money for a higher return than they would get from a bank. In India, families buy gold for their children's marriages, business investments, or other purposes. The investment in gold is better suited for easy conversion into money from the bank and gold merchants in the shortest possible period. As the price of gold has been steady over the last few years, traders, buyers, and investors have turned their attention to other investment possibilities. The consumer gains an advantage by comparing gold to other investment alternatives, allowing them to grasp the investment pattern for their hard-earned money, which is projected to yield high returns in the future.

Let us discuss how investment in gold can be beneficial in the long run-

1. Effective Inflation Hedge: Gold has shown to be a good inflation hedge, even amid economic downturns, pandemics, and market volatility. It is the most effective inflation hedge. In the long-term, gold has witnessed tremendous asset appreciation and has become a must-have in one’s investment group.

2. Diversification of Investment Portfolio: One can easily diversify the investment portfolio with gold investment. If you do not have the budget to invest large amounts in gold, you can start with small amounts. Regular investments even in small amounts in gold can yield high results. Unlike other forms of investments, gold investments can be easily liquified without the restrictions of when to redeem your gold fund.

3. Tax Benefits: Certain gold funds also provide tax benefits i.e., tax exemption that can further add to your investments as these are treated as a non-equity product from a tax perspective. The tax benefits can be availed on such funds after a year of investment.

4. Underlying Value of Gold Does Not Change Drastically: One of the key benefits of investing in gold is that the underlying value of gold does not change drastically even if the price goes down. Hence, your money remains safe even in the worst of circumstances. Additionally, since gold stands to be inversely proportional to equity investments and shares, even in situations when

the equity market shares perform badly, gold still performs well.

With not one but numerous benefits of investing in gold, it shows that it can prove highly beneficial in the long run. This is a minimum risk investment model with high security which is why more and more people prefer to invest in gold.

How to Start Investing in Gold?

The simplest way to start investing in gold is by purchasing physical gold coins, jewellery, bullions, artefacts. If you want to further explore the arena of gold investment you can also opt for ETFs (exchange-traded funds) or gold funds. Remember that investment in gold is a fruitful way of growing your wealth without the risk of major downfalls or depreciation. Also, gold investments help in making your long-term dreams such as marriages, home, etc., come to reality. Start investing early for a longer period to avail the best results on your investment.

This article was authored by the MD and Founder, Gem Selections

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.