You might wonder is Gold a good investment, or what is the importance of Gold as an Asset? It’s natural for an investor investing in Gold to know its significance since Gold is an inert metal and doesn’t earn any interest. Gold is a popular investment for ages and is preferred by many because of its value and rich history. Many people, especially Indians, invest in Gold to meet their financial goals. In this blog, I will share the importance of Gold as an asset. So let’s dive into this and understand the importance of Gold!
Importance of Gold as an Asset
Keeping the Gold as an Asset is a tradition for Indians that doesn’t seem to fade ever. I will share with you some of the importance of keeping Gold as an asset.
- Gold acts as a diversifying investment, and it is not like stocks and other financial instruments. It is an easy and convenient way to diversify your investment portfolio. It moves in the opposite direction to the rupee and stock market.
- Gold is easy to buy and sell in the market. When the prices fall, you can invest in Gold, and whenever the prices rise, you can quickly sell it.
- The value of gold rises when the cost of living increases; therefore, it is a hedge against inflation. During inflation, the spending power of a dollar can erode, but Gold can help you hedge against that loss of value.
- Gold is considered a crisis asset and retains its value when there are financial uncertainties.
- One can save for the long-term by regularly investing a small amount in Gold. Because of its easy liquidity, more people love to invest in gold bonds.
- When you invest in Gold, you get some tax benefits. Some of the gold funds, such as the SBI gold fund, are treated as a non-equity product from a tax perspective. After one year of investments, you can claim long-term capital gains tax benefits on these funds.
- Gold is known to show a steady and good performance during the recession period, unlike risky assets such as stocks.
- Gold can be passed on quickly to the next generation, which is quite common in our country. It is a good option for saving your money for future needs.
ULIPINDIA.COM helps you in investing in Gold.
What influences people to invest in Gold?
For ages, Gold is regarded as the best safe asset, and therefore people buy Gold in periods of uncertainty. Even during a pandemic, one can see a hike in Gold prices. Investors believe that Gold would have intrinsic value in extreme scenarios of economic collapse. It is a tangible asset and keeping in mind that the cost of gold will rise in the future, people prefer buying it.
Conclusion
I hope you find this article useful and get to know the importance of Gold as an Asset. People usually buy Gold and keep it as an asset for their long-term benefit. Gold is considered as a hedge against inflation. You can go through the guide mentioned above to understand the importance of Gold as an Asset. Invest in Gold through ULIPINDIA and avail long-term benefits. If you like reading my article, you can comment below in the comment section.
I am looking forward to your valuable feedback and comments! Thank you.
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