DHANTERAS – TIME TO BUY GOLD ETF

Its Dhanteras and its coming after, seemingly, years of being home and suppressing all the wants.

Just take a walk along the markets and look into the gold shops from the outside – its packed with people. The Tanishq shop at Matunga in Mumbai says that they have never been so busy and this has been the scene a couple of months before Diwali.

So, telling people that they need not buy gold during this Dhanteras might be like crying down a dry well, you will only hear an echo.

But seriously, if we can get over the “tradition” and what we call our “culture” of buying physical gold, buying Gold ETFs are the best bet. They work exactly the way gold does – the perfect hedge against inflation and saves you the hassle of storing the gold and paying the making charges. Of course, you cannot wear it around your neck but still, if its more about maintaining the culture, pride and show-off should not come into the picture, right?

A Gold ETF is an exchange-traded fund (ETF) that aims to track the domestic physical gold price. Purchasing Gold ETFs mean you are purchasing gold in an electronic form. Gold ETFs can be bought or sold on the exchanges directly using demat accounts.

This Gold ETF actually is as good as 99.5% pure gold. One gold ETF = 1/100 of 1 gm gold, with prices moving in tandem with that of gold – gold price rises by 5%, your ETF also rises by 5%.

 The ETF’s have low ticket size, as low of Rs.50 and one can accumulate over a period of time. Can you buy today anything of worth at Rs.50? The good part, its truly liquid, being held in demat form and purchased, traded online, you can buy and sell as and when you wish.

Really, its best to spread your eggs in many baskets. Instead of only equity, its best to allocate some part of your kitty to Gold ETFs.

Any takers?