Physical Gold as Investment?

raksrules

Elite
First I want to clear that I am aware that SGBs is ideally a very good way to have gold exposure in your portfolio. But lately, there has been no new tranches and also there is lock-in period of 8 years (to avail tax free returns). I am trying to diversify my portfolio which is equity heavy, into a fixed amount in gold purchase every month (or collect money and buy every quarter or something).

I know buying jewellery is a bad idea from investment perspective. I am leaning towards 10 gms bars or coins or so instead as they should have almost no making charges. I plan to reduce my mutual funds investment by 20K per month and collect this money over say 4 months and then buy a 10 gms coin / bar.

I would appreciate views of people who know better than me in this regard.
 
raksrules said:
First I want to clear that I am aware that SGBs is ideally a very good way to have gold exposure in your portfolio. But lately, there has been no new tranches and also there is lock-in period of 8 years (to avail tax free returns). I am trying to diversify my portfolio which is equity heavy, into a fixed amount in gold purchase every month (or collect money and buy every quarter or something).

I know buying jewellery is a bad idea from investment perspective. I am leaning towards 10 gms bars or coins or so instead as they should have almost no making charges. I plan to reduce my mutual funds investment by 20K per month and collect this money over say 4 months and then buy a 10 gms coin / bar.

I would appreciate views of people who know better than me in this regard.
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Check with PNG stores they have 2/3 such schemes which not only allow monthly gold buying (like the marathi "Bhishi") but also have plans like buying jwellary in future that discounts on making charges or 10% addition post 12 installments etc. DOubt its infor is available on web....
 
Vagabond said:
Check with PNG stores they have 2/3 such schemes which not only allow monthly gold buying (like the marathi "Bhishi") but also have plans like buying jwellary in future that discounts on making charges or 10% addition post 12 installments etc. DOubt its infor is available on web....
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Most of the jewellery shops like Tanishq, Malabar does have monthly schemes only problem we have purchase some kind of jewellery with them which will have wastage, making charges also u will gain much profit there which in my opinion is not worth.

If some stores provide coins by chance that's better investment which at least in my city none of the jewellers does that .
 
I checked the mmtc website (found the name on reddit) that people told is govt of India entity. But their price is too high like 88K for 10gms.
People have told it is of top purity so worth it. I am not sure.
 
Start SIP in Gold ETFs as per cash flow. When your total investment exceeds 10g gold price, withdraw 10g price amount and get 10g Gold Coin. Continue, rinse, Repeat.
 
Your idea is good. Do note that taxes on redemption or sale is high. If you plan to use the same to make a jewellery, trust is a key issue of which Goldsmith.
Biggest risk is security of having such items in the house. Also if you are going abroad, you can buy them from there. Dubai and SG are good places to get them. Plan it in such a way to take advantage of Shopping festivals at that time.
I know of someone who had invested 10L retirement amount in 1st SGB and relishing the future profit scenario. Also another Kerala NRI who has been saving his money in gold Jewellery for 15 years for his daughter's marriage. He now has 120 sovereigns. Putting these two reflects the mindset of people.

Gold ETF and others, Tax on sale or redemption is to be noted yearly. Never trust any Govt. ?
 
AgentBane said:
Most of the jewellery shops like Tanishq, Malabar does have monthly schemes only problem we have purchase some kind of jewellery with them which will have wastage, making charges also u will gain much profit there which in my opinion is not worth.

If some stores provide coins by chance that's better investment which at least in my city none of the jewellers does that .
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Thats one of alternatives I mentioned, You can take away the pure coins or rolled rings which will not have making charges or wasteges...