Investing in precious metals is a surefire way of both diversifying your portfolio and protecting it from inflation. The rarity, usage in the jewellery trade, industrial applications, and durability are all factors which make these metals precious and an excellent investment choice. No matter where you are in your investment journey, precious metals are a safe investment option. In this post, we will examine how you can invest in precious metals, and why investing in digital precious metals is a good strategy for your portfolio.
How can one invest in precious metals?
There are many ways to invest in precious metals. In this section, we will discuss the various ways to invest in them both offline and online.
1. Buying Physical Precious Metals
A traditional method of investing in precious metals is by buying physical gold or silver, coins, bars or jewellery. This can be an expensive affair, and most people generally tend to buy jewellery at certain, auspicious times of the year, such as Akshaya Tritiya or Dhanteras. The disadvantage of this method of investing is that one’s choice of metals is limited to gold and silver alone. Metals like platinum and palladium are not sold on the open market. Another disadvantage of this method is that jewellers usually add making charges to the price, making it more expensive to buy. Additionally, investors will also have to shell out money to store this jewellery in vaults, making buying physical precious metals an expensive affair.
2. Investing in Gold Sovereign Bonds
Investing in Gold Sovereign Bonds is another popular method of investing in gold. According to the Reserve Bank of India, “a Gold Sovereign Bond is a Government Security, denominated in grams of gold. They are an alternative to holding physical gold. An investor in a Gold Sovereign Bond pays the issue price in cash, and will redeem the returns on maturity in cash itself.” The disadvantage of this particular method of investing in precious metals is that it has a lock-in period, the investor doesn’t own 100% of the gold, and it is redeemable only in cash, not the metal itself.
3. Investing in ETF’s
Investing in Gold Exchange Traded Funds is another method of investing in precious metals. According to the Association of Mutual Funds in India, “A Gold ETF or exchange traded fund aims to track the domestic physical gold price. They are a passive investment and are based on gold prices and invest in gold bullion. One Gold ETF is generally equivalent to 1 gram of Gold. The disadvantage in this method is two-fold, one, that the investor doesn’t own the physical gold. Two, the choice of metal is restricted only to gold.
4. Investing in Mining Company Stocks
Investing in stocks of mining companies is an indirect method of investing in precious metals. It involves actively researching the stock prices, tracking the movement in stocks and buying and selling at the appropriate time. This may give good returns over a period of time, but not to the same extent as the actual prices of precious metals.
5. Investing in Precious Metals Online
Investing in digital precious metals online is the latest, most convenient and effective way to invest. Anyone with a smartphone can download an app, like eBullion, complete a simple, hassle-free KYC process, and begin investing in precious metals of their choice, in amounts as low as Rs. 100. Powered by Hindustan Platinum, eBullion allows you to invest in gold, silver, platinum and palladium. Being a London Good Delivery Partner in Platinum and Palladium ensures that there is 100% trust in the quality of the metal invested in. What’s more, eBullion vaults only the purest metals. Redemption is as easy as investment and you can redeem your investment in cash or gold at any given point in time.
Investing in digital precious metals is simple, cost-effective, completely safe and with a genuine, transparent player like eBullion a must have in the arsenal of every investor.
Citations:
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=109
https://www.amfiindia.com/investor-corner/knowledge-center/gold-etf.html
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