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Buying gold is both prestigious and auspicious for Indians. Gold sales grow throughout festivals and wedding seasons. The best time to buy gold, however, is during Makar Sankranti, Akshaya Tritiya, Dussehra, Dhanteras, and Diwali.
Dhanteras falls on the 13th day of the Hindu lunar calendar, marking the first day of the five-day Diwali festival. According to Hindu mythology, on Dhanteras, Goddess Lakshmi emerged from the ocean with a pot of gold in her hands during the churning of the sea, also known as Samudra Manthan.
Every year on this auspicious day, Goddess Lakshmi is said to visit worshipers’ homes and bestow money, prosperity, and good health. So, in order to be blessed by her, people invest in gold during this time period in order to boost their fortune in the upcoming year. On this day, gold is stored in puja, and a lamp called Yama Deep is lit in front of the main door to seek the blessings of Lord Yama and goddess Lakshmi.
Purchasing gold during the Dhanteras-Diwali season is regarded to be akin to welcoming Maa Lakshmi, the Goddess of Wealth and Prosperity, into one’s home. Most people are unable to resist the appeal of gold. It is an asset that offers the majority of people decent returns and allows them to have a secure financial future.
In India, most rituals and traditions entail the gifting of gold. It is considered lucky in addition to being a valuable source of income Gold is a valuable asset whose value has steadily increased, making it a safe and secure investment. As an investor, gold has shown to be one of the most highly lucrative investments.
Gold has provided unmatched returns than other asset classes like equities, real estate, mutual funds, fixed deposits, recurring deposits, and NPS. In India, gold has provided CAGR returns of more than 11% over the last 5, 10, and 20 years. Furthermore, whether the 24k gold is purchased in real or digital form, the seller always offers a repurchase guarantee. If one sells something anywhere in the world, he or she will receive the full value of the item.
During Dhanteras, jewellers provide several festive offers and discounts on making charges, so it is the best time to buy gold jewellery. As a security or asset, gold is extremely liquid and portable. It may be converted to cash at any time, anywhere in the world, and is regarded as a helpful acquaintance.
Gold is a significant diversifier in a portfolio and is seen as a safe-haven asset in times of global risk-off moods due to its low correlation with other asset classes. It is seen as a wealth safe haven and a hedge against inflation and currency depreciation. Gold investments should account for at least 10% to 15% of a person’s net investment portfolio.
Investment in Physical Gold has been done in India for 5000 years by all types of earning age groups. It is the most preferred way of investment for Indians. But with digitization gaining popularity worldwide, new-age investors, particularly urban millennials, prefer to invest in gold via Gold Futures, Gold ETF, Sovereign Gold Bond and Digital gold. Each form of investment has its own pros and cons. The decision of opting for which option completely lies with the investor. An investor has to understand the investment objective and risk factors involved in all options.
If you are buying physical gold in the form of jewellery, coin or bar, you can feel its allure and tangibility. You can flaunt it and feel a sense of ownership. But if you want to take advantage of gold’s price increase, you can invest in Sovereign gold bonds (SGBs) that provide interest over and above the gold price. Meanwhile, Gold ETF and Gold Futures allow you to buy 24K gold on an exchange platform. Additionally, digital gold gives you the advantage of buying 999 fineness gold for as low as Re 1, anytime from the convenience of your home.
As interest rates have been rising around the world, gold prices have corrected this year. This Diwali has given the best opportunity for long-term investors to buy gold on this auspicious day and take benefit of lower prices.
(Author is Prithviraj Kothari, Managing Director of RiddhiSiddhi Bullions (RSBL))