Best Ways to Invest in Gold in India 2017

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Gold is believed by the experts and layman equally to be the most robust mode of investment. Undoubtedly, it is the favorite investment avenue in our country. And for the right reasons, the performance of gold has far surpassed the performance of the equity market or real estate as seen for the last 10 years. Gold is just the right asset to let your savings keep a step ahead of the inflation. Though in the early phase of 2017, the market has witnessed a stumble in the prices of gold, but the experts believe this phase is only transitory and will pass soon.  

Coming to the million dollar question, what are the best ways to invest in gold and which one of them is the best. Since ages, the conventional and the only best way to invest in gold was to buy physical gold, in the form of coins, bullions or jewelry. But with time, more evolved forms of investment emerged like Gold ETFs (exchange traded funds) and Gold Mutual Funds. Gold ETFs is like buying a proportionate ownership in gold without having to carry or store the actual physical gold. It is becoming the new favorite among investors as it frees them from bearing the risk of theft or burglary. Gold Mutual Funds involve making an investment, not in gold, but in companies engaged in gold mining. In the year 2017, these three seem to be the best ways of making an investment in gold. They come with their own set of pros and cons. Let's look at some of the contrasting features between Gold, Gold ETFs and Gold Mutual Funds. 

Investment in Gold Vs Gold ETFs Vs Gold Mutual Funds 

Gold

Gold ETFs (Gold Exchange Traded Funds) Online

Gold Mutual Funds

It is simply making a direct investment in physical gold

It is somewhat similar to making a direct investment in gold, but here the investor buys a proportionate ownership in the collective vault instead of buying the physical gold 

The investment is made not in gold but in the companies involved in mining the gold 

There's no need for a demat account to invest in Gold

The investor needs to have a demat account  

There's no need for a demat account to invest

Change in the price of gold directly affect the prices of Gold ETFs

Change in the price of gold directly affect the prices of Gold ETFs

Change in the price of gold does not affect Gold MFs directly

There's no investment charge involved but if the gold is bought as jewelry or bullion,  the buyer has to bear the making charges.

The investment in Gold involves the asset management and brokerage charges, so the returns are lesser than the actual increased value of the gold

There's a charge involved for the management of the funds. Plus, there are entry and exit charges that make the overall returns smaller than the actual increased value of gold

The buyer has to borne the risk of theft/burglary associated with carrying around or storing the physical gold 

ETFs ease out the whole affair of trading gold as the buyer doesn't need to carry or store any physical gold   

There's no risk of theft/burglary involved in Gold MFs as the buyer doesn't need to carry or store any physical gold   

No paperwork involved in trading gold

Paperwork is involved in trading Gold ETFs

Paperwork is involved in trading  Gold MFs

Not affected by the stock market fluctuations. On the contrary, gold is the only commodity that keeps the hope of investors up in the bearish times

Not affected by the stock market fluctuations

Affected by the stock market fluctuations. When the stock market runs bearish, the gold stocks take the fall too

No Systematic Investment Plan (SIP) option

No SIP option

 

Gold MFs gives the investor an option to invest through Systematic Investment Plan that makes the investment more disciplined and  more affordable 

Best suited to the investors with conventional tastes in investments

Best suited for those investors who have a taste for trading intra - day. It's a big no for sluggish investors.

Best suited to the investors who have a risk appetite and a knack for stock market

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