Akshaya Tritiya 2024: Demystifying digital gold, where to invest and more

Gold stands as a generational asset symbolising prosperity and serving as a reliable investment passed down through time Its a contingency fund and an excellent means of portfolio diversification However is physical gold the exclusive route to profitCelebrating Akshaya Tritiya Midday featured insights from Kalpesh Ashar a SEBI registered financial expert shedding light on digital gold This modern investment avenue offers distinct advantages over physical goldWhat is digital goldDigital gold currency represents electronic money backed by mass units of gold typically 24 karats with 9999 per cent purity Transactions involving this financial instrument are entirely digital According to Ashar ideally 5 per cent to 10 per cent of your investment portfolio should be allocated to gold with the remainder dedicated to equity investmentsPhysical gold Vs digital goldContrary to popular belief physical gold may not always be the most advantageous investment choice Ashar emphasised several common issues associated with physical gold including challenges in storage concerns about theft additional expenses such as making charges and locker fees as well as authenticity issues Moreover the emotional attachment to gold jewellery often deters investors from selling it when needed thereby preventing them from fully capitalising on their investmentThis is where digital gold or Egold shines as it eliminates such barriers Unlike physical gold where making charges are deducted upon sale investors retain the full value of their asset with digital goldBefore delving into gold purchases its essential to define your purposemdashwhether for decoration or investment If your goal leans towards investment digital gold emerges as the ideal pathway forwardWhat are the ways of investing in online goldDigital gold can be invested in through three modes1 Goldbased mutual funds offer a convenient avenue to invest in a pool of securities including gold Similar to other mutual fund investments they provide great liquidity allowing investors to redeem their holdings within 24 to 48 hours2 Goldbased ExchangeTraded Funds ETFs function much like stocks as they are listed and traded on stock exchanges such as NSE and BSE Investors can purchase them through a demat account and trade them continuously at market prices Gold ETFs offer the advantage of buying and selling at realtime market prices providing flexibility and transparency to investors3 Sovereign Gold Bonds SGBs are governmentissued bonds with an eightyear lockin period A significant feature of SGBs is the annual 25 per cent interest rate coupled with the appreciation value of gold as determined by the RBI This makes SGBs one of the most lucrative investment instruments However the only drawback is the lockin periodGoldbased mutual funds and Gold ETFs are recommended for investors seeking shortterm investments due to their liquidity and flexibility On the other hand Sovereign Gold Bonds SGBs are more suitable for investors with a longer time horizon given their lockin periodWhat is the right time to buy digital goldBuy gold when there is gloom and doom in the world advised Kalpesh He emphasised When equities are underperforming or uncertainty prevails thats the opportune moment to invest in goldTo encapsulate theres no better time than now to allocate your capital to digital gold Patience and purpose are crucial for a successful gold investment particularly for young and risktaking investorsFor more insights watch the full interview here