How Good is Gold as a Investment ?
Gold: Indians are one of the highest buyers of Gold in the world. Conservative estimates say, Indian Households( other than RBI) hold around 25,000 tonnes of Gold. Reasons could be emotional, civilizational memories( constant attack by invaders made gold the easier asset to buy and hide) and the myth that, its a good asset to invest in. Lets look into the “investing” part of it. Any asset , be it gold or real estate or equity markets etc have to appreciate over the years to make it a “Invest-able asset” Gold can be bought as coins or jewelry or the more recent form of buying it in Demat form. In any asset- you have something called a ‘front load” cost. That is, the amount deducted,when you buy that asset. Example: Mutual funds have a front load fees of around 2% or less. Real estate will have ‘front load” cost like broker fees, registration tax/costs etc. What about Gold? They have ‘making/waste’ charges and GST. These front load cost makes a big difference...