Skip to main content

Gold ETFs help Portfolio diversification

 


   THE investible potential of gold as an asset class has been a function of jewellery and industrial demand, inflation outlook, strength of the dominant currency, geo-political stability and the gold supply variable. Given the historical and contemporary pervasiveness of gold as a store of value, and to a certain extent, a medium of exchange, gold has adopted a tendency of behaving like a natural currency. Therefore, the investment demand for gold tends to rise in the case of adverse economic conditions, rising inflation, weakening dollar, or general socio-political instability.


   The 15.45% CAGR run-up in gold prices since 2000 was largely attributed to the surfeit liquidity in the early part of the decade, while in the latter half, the turbulent economic conditions, post the sub-prime crisis, contributed to the gold rally. However, despite the teetered recovery in the global economic environment, the optimistic outlook on gold remains unchanged. And here's the reason why.


   Today's geo-political climate has become increasingly volatile, given the ongoing wars in the Middle-east, and the pursuit of nuclear arms by autocratic regimes. This uncertainty has increased further on account of rising tensions in the far-east Asian region.


   Meanwhile, the woes of the global financial economy remain subdued at best. The world's major economies have taken on extensive amounts of debt to keep their economies afloat. To add to that, the economic hardships of Western Europe haven't gone away either. The US economic performance, too, remains modest, with the unemployment situation continuing to worsen.


   Albeit the fear of a double-dip recession in the US and the EU may be unwarranted, yet there is a rising speculation, bordering to near certainty that the Fed-led quantitative easing may be on cards. Consecutively, the key global debt markets continue to remain defensive and maintain a relatively-high risk perception, which in turn, fuels the investment demand for gold.


   Also, traditionally, the gold demand has a seasonal flavour with the intra-year peaking in around November-December. This is attributable to post monsoon festivities in India, corresponding gold inventory expansion by American and European retailers, and the week-long national celebrations in China. Besides, the central banks (bankers) continue to remain net buyers of gold. The interplay of these factors provide a potent case for investment in gold.


   But, from the retail investor point of view, the physical investment in gold has a minor side-effect. Buying physical gold involves the risk of theft, misplacement and potential wrong-pricing. Additionally, when an investor needs to sell his physical gold, again at that point, he/she has to go through the inconvenient route of valuation, bargaining, transaction and delivery.


   All these angles involve risk, skill, and time — making the whole process inconvenient. But thankfully, an alternative method to invest in gold exists. That too without the inconvenience of the physical transaction — that is the Gold Exchange Traded Fund (GETF).


   Gold ETF is nothing but pure gold, traded online through a medium of exchange. Normally, each unit of a gold ETF is worth approximately 1 gram of gold at any point of time. The investors' take-away from GETF is that it allows the investor to invest in gold without bothering for the purity, security or liquidity of gold investment that is attendant with gold hoarding. GETF's online tradability and transactability is exactly like any other stock scrip, making buying and selling an almost intra-day day affair — an idea quite difficult with physical gold.


   In other words, what GETF does is that it gives you the ability to buy, sell, or hold gold at convenience. This idea, though relatively new in India, is quite popular elsewhere in the world. (has caught majorly elsewhere in the world). In India too, with rising awareness, Gold ETF is gaining ground.

 

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now