Gold is Old…What’s it about the gold investment that you should consider before investing? What’s the economic impact of your ‘Gold’ love? Read and find out below.
Every time you drive your vehicle that runs on diesel or petrol, you contribute a bit to polluting the atmosphere. While you take care of your convenience, you unintentionally pollute the atmosphere and that in turn contributes to global warming. So, you are a contributor to global warming. Think about this, you were just driving and you contributed to a global issue!
We’re not giving a lecture on environmental science and climate change impacts but trying to draw your attention towards your toxic love for gold. Yes, your love for gold is ‘toxic’ in a sense. Read on to find out more.
Oh My Gold!
Gold is synonymous with exuberance, trust and luxury. And, we Indians are specially quite obsessed with it. An Indian occasion that’s very special is simply unimaginable without gold. Similarly, old school Indians who believe in the concept of saving and investing, like parking their money with gold. And, why not? After all it’s an asset class that is considered to be never-depreciating.
But, is it all so rosy in case of gold? Is the precious yellow metal an ideal investment? Maybe not! From where we see it, gold is an overhyped asset class that is slowly eating away our economy. Just in case that was too harsh, it’s fine because it’s the truth. Today we’ll tell you a truth that might be hard to digest but the sooner you understand this, the better it would be. When you buy gold, you slightly increase the burden on Indian economy. And, that’s true!
Why Gold is not ‘Gold'?
This starts with a simple question – Why do we invest in gold? For good returns of course, you would say. But, you would be surprised to know that in the last 10 years, gold investments have generated a return of approximately 8.5 percent only. Is this justified based on the volatility and the additional hassle that gold carries with itself of storing it safely? Definitely not!
Besides this, India imports gold and the more gold you buy the more India has to import to cater your demand. It’s logically understandable that if imports are more, the economy would feel the burden. So, just think about it. You’re buying gold and unintentionally hampering the economy. But now that you know it, can you do something about it? Fortunately, yes!
Heard of Gold Bond?
In this situation the gold bond can be called nothing less than a savior. Think about a situation where you can invest in gold without facing the hassle of keeping it safe and also the economy doesn’t suffer. That would be ideal, right? So, there you go with the Gold Bond.
When you purchase a gold bond, you just have to comply with the lock-in period and your deposit gets its value based on the gold price post the lock-in period is over. So, if the prices soared, you’ll receive returns accordingly and by chance, if the price went down, the value of your deposit will be adjusted accordingly (just the way the value of your gold would be decided). And, for all this India doesn’t have to import more gold.
If you are buying gold for investment purpose then, purchasing a gold bond would be ideal. However, if you’re just concerned with the returns, then you might consider other asset classes as well (and we’re not talking about real estate here). If you try and follow the successful investors around the world, you’ll understand what we mean. And if not, you can do whatever you want with your money but then can not blame anyone if you don’t get the desired result from your investment.