Buy Gold Jewelry for investment: How to start?
Why Buy Gold Jewelry? Traditionally in India, people used to buy gold jewellery to meet their social commitments and needs such as for marriage, fashion or gifts. Many of them are not taking it seriously as an investment option and would hesitate to put a fair amount of their cash in this market. The major reason is unawareness about the facts and easy ways to enter in this field.
Either you buy gold jewelry or invest in other forms; gold has been giving one of the best returns over the years. Look at the statistics, gold has been one of the best investments since 2000. The price of this precious metal has risen from around $275 per ounce (2000) to above $1800 per ounce (2011).
Diversification of portfolio is must these days. You cannot just stick to the safest but lowest return options such as fixed deposit, government bonds, recurring deposits or liquid funds. Also you should not invest all your money into the high risk equities. So sit and plan judiciously about the various investment options. If you plan well, you won’t regret to allocate major portion of your Investment in gold.
Various ways to invest in gold
Many of us are familiar and following the usual way that we buy gold jewelry from known jewelers. In fact, there are quite a different ways to enter into gold investments which are more convenient and effective than our traditional way of buying. These are listed below:
• Physical form: Most important part to gold investment is buying this metal in pure form. You can buy gold jewelry, the gold coins or bars. The reason is that you can resell this gold at the market price whenever you feel so. These are easily available from jewelers, banks and even post offices.
• Paper Form: Buy the Gold exchange traded funds (Gold ETFs).
Best places to buy gold from:
• Jewelers: You can buy gold jewelry, gold coins, gold rings or gold biscuits from a jeweler. Look for 24 karat seal on the particular item before buying it. As to avoid fraud, visit your known trusted and reputed jewelers. Also, you can sell to the same jeweler when you need cash.
• Banks: all the major banks sell gold mostly in the form of gold coins. Banks are the most trusted source and we can be sure about the purity of the gold. Also banks provide the purity certificates of the gold coins. But, banks generally charge some premium over the market price. Also banks are not allowed to buy back the gold they have sold, so you would have to look some other buyer.
• Gold ETFs: it is an easy way to buy gold in demats form if your sole purpose is investment. Here you save your time and effort as it takes only few minutes to buy the units of your selected exchange traded fund. You also save the cost for storing gold biscuits or coins in bank lockers or such similar places. The added advantage is that you need not worry about the purity of the gold you are buying.
• Online: these days you have the option to buy gold jewelry or gold coins from many banks and jewelers, who sell gold online via internet. But this method has not been popular because of the concerns about the security, weight accuracy and purity of gold.
• Post office: this facility is available only in few major cities in India. A post office comes out to be one of the most reliable sources for buying gold coins. A post office is what you find in most of the villages and remote areas. So if the facility is extended to all the national branches, it would be very easy for everyone to buy gold.
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