From time immemorial, Indians have been in love with Gold and for a long time, it has been one of the go-to investment products. In fact, India is the second-largest consumer of yellow metal in jewelry form.
Gold acts as an inflation hedge that has the potential to hold your portfolio together in times of market volatility.
Simply put an Inflation hedge is anything that retains its value even at the time of inflation. From the investment point of view, all you would want from your investment is to hold its value at all times including even at the time of inflation.
According to the general trend, hard assets prove to be a great hedge against inflation and these hard assets include precious stones, oil, and precious metals like gold and silver.
Generally, gold prices do not fluctuate very heavily. Even if returns on equities decrease, gold could prevent investors from sustaining big losses.
Gold is a good way to add diversity to your portfolio. In the middle of unstable market conditions, a diversified portfolio can provide better returns and reduce risks.
Gold as an investment can act as a hedge against currency fluctuations and inflation.
The yellow metal is a real, tangible and rare good with limited supply that cannot be increased quickly or at will. These features make gold a key element during the so-called flight into real values or into hard assets, which happens when inflation gets out of control.
In other words, gold is the ultimate store of value which proves to hold its value over time , unlike paper currencies that are subject to inflation and lose their value systematically.
Digital Gold is a more easy and convenient way of owning physical gold. Instead of acquiring and storing physical gold, you can simply purchase digital gold which is stored in a MMTC PAMP locker with no extra charges.
This helps you to invest in gold without the hassle of storing and securing it from theft. Moreover, due to its concept and distinct structure, Digital Gold has much lower expenses as compared to physical gold investments.
The biggest benefit of buying digital gold is that you can buy it starting merely INR 1! The gold bought is 99.9% pure and is stored in highly secure vaults with MMTC-PAMP for which you pay zero storage costs.
You can also redeem your investment when you feel like or take physical delivery of your accumulated gold in the form of a coin or bar. However, you need to bear certain making and transport charges which can eat into your returns. You can buy or sell digital gold anytime or day and the platform displays live gold prices for buying and selling as well.
Conclusion
A diversified portfolio should also take into consideration a percentage of bullion so that the portfolio is safeguarded against inflation, market volatility and other external factors.