Financial PlanningOthersStock Markets Guide

This Akshaya Trithiya, make a wise investment

Posted Gopal Gidwani

Every year, Hindus and Jains celebrate the festival of Akshaya Trithiya during the month of April. The festival signifies prosperity, joy and happiness. People believe that by starting any new venture such as investing money or buying assets on this day can result in great success. That’s why, many people buy gold on this auspicious day.

Time to stop investing in physical gold?
Indians are known for their love of gold. No marriage or festival is complete without people bedecked in beautiful gold jewellery. However, when it comes to investments, maybe it is time to stop looking towards physical gold. Unlike shares or bonds, physical gold does not help you earn passive income in the form of interest or dividends. You can only realise your earnings when you sell the precious metal. Besides, you need to physically store it in a secure place to avoid loss or theft. In addition, you need to consider taking out insurance too. All this can make physical gold a cumbersome investment.

What are the alternatives?
1) ETFs
Exchange Traded Funds (ETFs) are a way of investing in gold electronically. Gold ETFs are mutual fund schemes where the money of investors is collected and invested in gold bullion. These funds are traded on the stock exchange similar to how shares of companies are traded. The best part is that you can invest in as little as 0.5 gm of gold through this avenue. Your investments are stored in a demat account. Here, you don’t need to concern yourself about purity, safety or security of your gold. Here, the risks are lower and the financial benefits are greater.

2) Invest in mutual funds through SIPs
If you are planning to invest your money for good future returns, it is important to know that gold is not the only option. Mutual fund investment is another option for you to consider. Investment in mutual funds through Systematic Investment Plans (SIPs) is a great way to ensure wealth generation. In the long term, the risk of investment is minimal and the returns can be great. By investing in equity funds, over long periods of investment, you can generally earn anywhere between 10-15% per annum on your investments. With these investments, you can steadily fulfill your financial goals down the line.

To sum up
For many years, Indians have been buying gold on the auspicious day of Akshaya Trithiya. However, this is not the only way to ensure prosperity in the future. If you wish to buy gold, there are better ways like gold ETFs compared to physical gold. And if you wish to invest your money, then SIP is perhaps an ideal option. So this Akshaya Trithiya, how about making a wise investment choice?

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