Return

This investment proved remarkable return from 2006 to 2011. During that time span Gold has given an average return of 29% per annum which was any time better than other investment options. However, the long term average return on gold investment is less than 10% p.a. As one can say technically or ironically but history always repeats itself.

Buying Jewellery

Our traditional investment is jewellery purchase where one can buy gold ornaments, bars or coins. However, it has its own disadvantages, total buying cost involves heavy making and wastage charges, it can be 10 to 20% of total cost. However, when you try to sell the same piece to same jeweller, he will buy it below market rates and deduct those making and wastage charges from the total price of your jewel.

Buying Gold coins and bars

Investment in gold coins and bars is a better option than purchasing jewel. Banks and jewellers sell the coins and bars but the bank cannot buy it back. So we should buy gold bars and coins only from jewellers.

Gold ETF

Gold ETF means Gold Exchange Traded Fund. It is a type of mutual fund which in turn invests in gold and the units of this mutual fund scheme is listed in the stock exchange. You need to buy Gold ETFs from the stock exchange by way of opening a demat account and trading account. You have to pay brokerage fee (which is generally between 0.25% to 0.5%) for buying and selling of these Gold ETFs. You will have to further pay 0.5 to 1 % charges as fund management charges.

Gold Mutual Fund

Many Mutual funds have gold investment schemes through which we can invest. Also we invest small amount through monthly Systemic Investment Plan. It is very much helpful for retail investor. Fund portfolio, Fund comparision, Returns everything we can see the fact sheet.

Percentage of Gold Investment

Average 5% to 10% of your over assets can be invested in gold. If you invest more in gold, remember in the long term return on gold investment is less than 10% p.a.