Should you invest in Gold?
Gold has been a valuable commodity since 4500 BC (Even it has got buried along with King’s Graveside). This longstanding effect will help us to understand the love and attraction we have for this yellow metal.
Gold is always in with love crisis situation. Whenever there is an economic crisis and turmoil, investors always search for a safer place to put their money and now you understand why gold prices are soaring high. Hence gold prices are negatively proportionate to Equities.
At present gold is costing Rs.4500 per Gram as on today ( 28th Apr 2019 ). One year return on gold was 64% as on 13th April 2020.
As a general Thumb Rule – Diversification is the basis of wealth Creation – Gold should be an important asset in everyone portfolio, but the percentage of the gold should not exceed 15% of the networth or total Portfolio. (While the ideal percentage is 10%)
You can purchase gold as Physical Jewellery, Gold bar / Coin, Gold ETF, Gold Mutual Fund (Fund of Funds ), E Gold and Gold Futures.
Tax on Gold
If you sell your gold 3 months from the date of purchase then in will be added to your gross total income Will be treated as Short Term Capital Gains ( STCG)
If you are selling gold after 36 Months the proceeds are chargable on LTCG (Long Term Capital Gains). This is 20.8% after applying indexation.
Conclusion – Gold is an important asset and helps out on diversification. You don’t have to add gold as a asset, If you already have 15% of your over all wealth as Gold. You should consider adding gold as an alternative asset if you are lesser than 15% once the gold prices settle down may be after 6 months period.
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