There are 6 things to keep in mind before investing in digital gold during the festival season, including limited investment and portfolio building.

  There are 6 things to keep in mind before investing in digital gold during the festival season, including limited investment and portfolio building.

There are 6 things to keep in mind before investing in digital gold during the festival season

It would be wise to invest in digital gold instead of physical gold

Gold has received a 32% return from January to October this year

In our country, people buy gold on festive days. Many people have now started investing in gold funds or digital gold instead of gold coins or bars/biscuits. Experts believe that it is better to invest in gold according to the diversification of your portfolio. From January to October this year, gold has returned about 32%. If you are also thinking of investing in gold then here are 5 things you should keep in mind.

Invest in digital gold, not jewelry

Gold jewelry is very popular among Indian women. But now this is not the right investment option. When gold was cheap, buying gold bracelets, necklaces or other jewelry was considered a good option. 

At that time people had no other choice but to invest. But today there are many options for investing in gold. Investors can buy/sell gold electronically through Gold Exchange Traded Funds (ETFs) and earn an arbitrage gain.

 Gold is purchased by the ETF in units, where one unit weighs one gram. This makes it easier to buy gold in small quantities or through a SIP (Systematic Investment Plan).

Invest in Sovereign Gold Bonds

You can also invest in sovereign gold bonds. The center is issuing sovereign gold bonds. Its 7 series has been released and the eighth category will come on November 9-13. If you are planning to invest in gold this Diwali, investing in it will be beneficial for you. Sovereign Gold Bonds also offer annual interest of 2.50% on the issue price. This money is automatically credited to your account every 6 months. You will not get this kind of benefit on physical gold and gold ETFs.

Gold can also be invested through SIP

Like mutual funds, a systematic investment plan (SIP) can be introduced in gold. With this, even an amount of Rs 500 can be invested in gold for a long time. The SIP amount is automatically deducted from the bank account. No Demat account is required to invest in Gold SIP. In this, many companies issue Gold Fund of Funds, in which you can also invest through SIP. You can invest in Gold SIP through any fund house.

Check the purity before taking physical gold

If you decide to invest in physical gold, it is important to be careful when buying gold, as it is not easy to identify pure gold. But with a little precaution, you can avoid buying the wrong thing. Consider its quality when buying gold. Only buy gold by looking at the hallmarks on the gold. Hallmark is a guarantee of the government. 24-carat gold is considered to be the purest gold. But her jewelry is not made because it is too soft. Usually, 22-carat gold is used for jewelry. In such a situation keep in mind that the jeweler does not charge you 24 carats.

The craze for gold ETFs increased among the people

Gold ETFs have not seen much growth in recent times. However, its craze among investors has increased in the last few months. Demand for Gold Exchange Traded Funds (ETFs) has increased during the Corona period. Investment in gold ETFs has increased for the fifth consecutive month. In August, a total of Rs. 908 crore has been invested. By August this year, a total of Rs. 5,356 crore has been invested.

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Only a limited investment in gold is beneficial

Even if you like to invest in gold, you must make a limited investment in it. According to experts, only 5% to 10% of the total portfolio should be invested in gold. Investing in gold in times of crisis can bring stability to your portfolio. But in the long run it can reduce the return on your portfolio.