Gold buying is considered auspicious on Akshaya Tritiya. However, experts believe that investors should look at the value gold brings in as a strategic asset during this season beyond it being auspicious.
Considering the incremental diversification benefit gold brings to the portfolio, Nirav Karkera, Head of Research at Fisdom, tells that the yellow metal should be seen as a mainstream asset for strategic allocation.
“Gold, as an asset, is an effective hedge against not just inflation but also currency depreciation and systemic market risk. In the long term, we have seen that the allocation to gold has not just built resilience against down-cycles, but has also actively participated in economic upticks to capture and deliver upside to the portfolio,” Karkera says.
Unless required for consumption, Karkera suggests that one must try and buy gold in non-jewellery forms to save on value-destructing making charges.
“It would be a smart option to invest in digital gold which takes away the storage and purity concerns out of the picture,” he stresses.
Ashraf Rizvi, Founder & CEO, Digital Swiss Gold & Gilded, also believes that digital gold is the safest option that allows customers to buy gold, from the comfort of their homes on Akshaya Tritiya.
“Moreover, this is the right time to invest in digital gold as it is an attractive proposition for investors looking at long-term savings as gold has always been an insurance against uncertainties,” he explains.
Rizvi further stresses that digital gold offers all the benefits of physical gold along with the ease of trading and transactions in smaller denominations.
“Customers get certified gold with quality assurance which is stored securely in vaults. There are no making charges associated with it, as is in the case of physical gold or jewellery, thus enabling greater savings to customers. It offers the added advantage of customers not having to worry about the storage. The ease of selling whenever needed through the app, is another crucial benefit,” Rizvi says.
Investors can buy digital gold like ETFs and gold funds, where customers need to pay for the cost of the demat account as well as an annual maintenance cost. Another option is the Sovereign Gold Bond (SGB) which offers attractive pricing and an annual return.
"However, liquidity may not be available with SGBs as the required holding period is up to eight years. So, it is more like long-term bond ownership," Rizvi opines.
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