Retirement savings has never been a hard decision for
Indians. For ages, it has always been the gold. If I look back and saw my
relatives and friends, many preferred to keep gold at their homes, in some
form. Women, in particular, will buy jewelleries and keep in the locker,
believing that it will come good if they need money in times of crisis. Even
those who live in urban India did the same. Imagine what the rural India did
with gold. Though, times have changed now, and more investment arms have
cropped up, yet, gold remains the best investment bucket for most Indians.
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It is still considered as the best retirement investing
option. Such has been the affinity for Gold among Indians that people have
imported more that 800 tonnes of gold in just one year, in the year 2012-13.
The finance ministry feels that high
imports of gold have also played a role in affecting the current financial situation.
As a result, the current account deficit has increased, perhaps more due to
gold imports.
How effective is gold as a form of investment
Gold may or may not give you benefits; however, it is unquestionably,
a hedge against inflation. Investments, though, is a different ball game. You invest
not just to keep your investments as a hedge against inflation, but also to
make more money over a period of time. There are now many investment options –
bank fixed deposits, mutual fund investment, pension plans, and equity of
course. And all of these have been extremely popular among Indians.
In India, people have become fond of gold. I couldn’t find
any particular reason for it. One reason that comes to my mind is the traditional
passing of the habit. When your parents and grandparents do it, and then tell
you to do exactly that way, it becomes a reason enough to use gold as
retirement savings. There’s an inherent mentality among people that gold’s
value will never go down, and it has stayed deep in their minds.
The most significant aspect here is to remember that gold
will not help you accumulate money as some of the other investments can, which
gives you reasons to consider other forms of investment. However, your retirement
investment portfolio should certainly have some percentage of investing
in gold, and that gives you stability in your savings.
Even globally, gold has been considered a very safe
investment option. Many investment gurus from western countries also believe
that at least around 10% of the portfolio should carry gold investments. Now
times have changed, investors have become exceedingly valiant, and they are not
afraid to take risks.
Your best choice
Your choice is your own; however, it is crucial to
understand the market condition before you wish to drop your money. Bank fixed
deposits are also a supremely safer option. It gives you results. If you have a
sizeable amount in fixed deposits, it becomes a mandatory pension plan for you.
Moreover, your money is still safe and lies with your bank, which can be
withdrawn anytime.
Mutual funds, on the other hand, may not be extremely risky,
yet, to invest in mutual funds, one requires certain knowledge of the market.
Choosing the right fund is essential, if you want to make your investments bring
results to you.
Equity is highly risky,
but it provides you more excitement, and better chances of making quick money.
You need to be extremely careful, and should seek professional guidance while
investing in stocks.
Finally, if nothing works for you, Gold is the best
available option.
By Rajiv Sighamony
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