Today is Akshaya Tritiya. For Hindu's all over the World, this is one of the most blessed days of the year and an auspicious day to buy gold. Lord Krishna gave the Akshaya Patra to Draupadi as well as to his friend Sudama on this day. This is a symbol of wealth and prosperity. Hindu's believe that if gold is bought on this day, wealth and prosperity would follow in the future.
Indians love gold. Its glitter....lustre....No wonder Indians are the top consumers of gold in the World. What better day to buy gold than Akshaya Tritiya? Ever wondered what's the meaning of the word Akshaya? In Sanskrit, Akshaya means 'Never diminishing'. This makes Akshaya Tritiya an auspicious day to buy gold or property.
So why do Indian women love gold? Gold is an asset you, a woman in India, can truly call your own. Gold fulfils your social, cultural and economic needs. Gold is also a friend in an emergency. You can sell or pawn your gold jewelry in a financial emergency. Gold is your status symbol.
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You and other Indians love to buy gold coins and jewelry on Akshaya Tritiya. Indians who reside in rural areas buy a lot of gold jewelry on this day. A lot of gold jewelry is bought for weddings. Jewelers lure you to make gold and diamond jewelry purchases on this auspicious day, with attractive schemes. Many jewelers offer a 50% cut in making charges on gold jewelry, if you purchase a certain quantity of gold jewelry. There are also other freebies.
Should you be buying gold jewelry this Akshaya Tritiya? You would prefer buying gold jewelry this Akshaya Tritiya, but if you don't need gold jewelry immediately, you can buy gold coins and bars. When you need gold jewelry, the jeweler will melt this gold and make gold jewelry of the latest design. Check for the BIS (Bureau of Indian Standards) hallmark on gold jewelry, which is an assurance of the purity and quality of the gold jewelry. Isn't this a great idea?
1. Invest in gold ETF's and buy gold of 99.5% purity
Gold Exchange traded funds typically called gold ETF's are open ended mutual funds. They are listed on the stock exchange just like shares and the purity is guaranteed by the AMC. One unit of the gold ETF, could correspond to one gram or even half gram of physical gold. The value of the Gold ETF is given by its net asset value (NAV). Your gold ETF tracks the price of gold and is backed by gold of 99.5% purity. Can the gold jewelry you buy be so pure?
Gold ETF's are held in the dematerialized (electronic) form. You can buy units of Gold ETF's on the stock exchange (NSE or BSE) and store them in your demat account. All you require is a demat and trading account. You can sell the gold ETF's from your demat account and buy physical gold, when you require gold jewelry for say your wedding.
With Gold ETF's you are buying and selling gold through a broker in the NSE or the BSE. Isn't this a real great way to buy gold free from any impurities and adulteration?
2. Aren't Gold ETF's expensive compared to gold jewelry?
Fund houses manage the Gold ETF's. The total cost of managing the Gold ETF + Operation and other expenses of the mutual fund house, are called expense ratio. If you have INR 2 Lakhs of gold ETF's in your demat account, you would be paying INR 1000 - 2000 each year, if the expense ratio is 0.5-1%. Yes, as you buy more and more Gold ETF's, the expense ratio would go up.
But, what about the gold coins you buy at the bank? Don't distribution costs make gold coins sold by banks, 5-10% higher than the market price of gold? If you store gold jewelry in a bank locker, don't you have locker charges?
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So why buy gold ETF's? Simple....It's a convenient way to buy, store and sell gold. Just check the returns, expense ratio, total assets under management and volume of trading in the gold ETF.
Ideally you should have 10-15% of your portfolio in gold. This may be in the form of gold coins, bars or Gold ETF's. Why not buy Gold ETF's this Akshaya Tritiya and enjoy the wealth and prosperity of this auspicious season? Be Wise, Get Rich.
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