Established in the year 2016, we are an emerging chartered accountancy firm based in Bengaluru rendering comprehensive professional services which include audit, management consultancy, tax consultancy, accounting services and secretarial services.

Quote of the Day: "Greatness comes by doing a few small and smart things each and every day... it comes from taking little steps, consistently"

Tuesday, 17 April 2018

Things to know before Buying Gold.


Its somehow difficult to concede that investing in gold is not a wise financial decision. To include an asset in the financial planning basket of a household, the pertinent question to ask is: How would this asset be used? Investment in gold must pass that test.


As Investment:
In terms of buying gold as an investment, the scenario has undergone quite a change with the annual returns going down by more than half in the past 20 years. Over the last three years, gold has fetched a lower return of 4.68 per cent from 10.05 per cent earlier.
For Liquidity:
When there is adequate income, gold is bought; when there is a crunch, gold is pawned to raise money. The loan is repaid and the gold comes back home. Here, gold is a source of funding and a generator of liquidity. So one typically use gold to create a liquid asset that can be pressed into service. But, We have enough assets/ alternatives (with stable incomes) to take care of our liquidity requirements.
Untoward Incidents:
Consider an extreme situation of war, a riot, or a major disturbance that displaces the household. They have no choice but to leave and settle elsewhere in the world and begin all over again. What would they take along? Not their fixed deposit receipts or equity shares. But the gold, to be used anywhere in the world. It would be accepted unconditionally, helping them tide over the crisis. Thus, one should look at investment in gold as that portion which is for an extreme emergency.
Others:
All other purchases of gold, especially jewellery, should be seen as equivalent to other vanity indulgences such as clothes, bags and perfumes. 

What happens when we overdo the allocation to gold?
We collect assets that are seldom used. Gold is an unproductive asset. Unlike shares or bonds or deposits, it does not contribute to any kind of economic growth. A pile of gold will stay the same pile of gold no matter how much time passes. An equivalent amount of money deployed in a business or any other productive economic activity will generate actual wealth and will grow larger in a very fundamental way. Thus typically we hold a asset that generate no income. We invest in jewellery that comes with steep costs in the form of making charges and damages, and lose a portion of the value every time we transact. Thus, with the rising gold prices, the yellow metal is no longer considered a hedge against inflation. That is why we should not hold more than 5-10% of our wealth in gold. 
Source: TOI, ET

2 comments:

  1. Great share!

    Loved all that you shared, and you are right, one cannot deny the power of Google. For more Information or any help then visit now at Sand Blasting Machine, Shot Blasting Machine, Sand Blasting Machine for Sale, Sand Blasting Machine Manufacturer, and Small Sand Blasting Machine.

    Keep it works and share with us your latest information. In your post sand blasting machine manufacturer in India that are very useful for me. I understand the way of the attractive to the customer with the products.

    They are similar to small communities that you own - check them out if you haven't already.It's all got a lot better than before!t.

    Thanks for sharing. Have a nice week ahead.

    Visit at : www.blaster.co.in

    Also Check
    Portable Sand Blasting Machine
    Portable Shot Blasting Machine
    Shot Blasting Machine
    Portable Grit Blasting Machine
    Grit Blasting Machine


    Regards,
    Purnima Sharma.

    ReplyDelete
  2. Great share!

    I love this bucket list and you know you're right. sand blasting machine manufacturer. We all have the same amount of hours in a day so put them to good use. We all have to start somewhere and your plan is perfect. I understand the way of the attractive to the customer with the products sand blasting machine.

    Sand blasting machines like shot blasting machine, sand blasting machine, and grit blasting machines, Wood Working Machinery Dust Extraction unit, Abrasive Blasting Media and various others. Keep it works and share with us your latest information. My time will come but I know I'm on the right path.

    They are similar to small communities that you own - check them out if you haven't already. It's all got a lot better than before!t. Value that list of thousands but I'll get there.

    Thanks for sharing. Have a nice week ahead.
    Visit at : www.gritblast.co.in

    Also check
    portable shot blasting machine
    portable sand blasting machine
    sand blasting cabinet
    grit blasting cabinet
    shot blasting cabinet

    Regards,
    Ankit Manawat.

    ReplyDelete