Sunday, March 22, 2009


The Uncertain times, we are living in, is reinforcing that Gold as the Best Investment Option in times of Distress. Gold Share indices have nearly doubled from October 2008 lows, though Gold has been up by 35%. The strong investment interest in gold has been fueled by concerns about the falling health of the US financial system. US President Obama's stimulus package is not enthusing many.
In these times of tight liquidity, many were pleasantly surprised when Gold Major Newmont's $1.5 billion deal sailed through quite easily, indicating renewed interest in Gold Companies.

The increasing printing and supply of US Dollar will only make the Dollar depreciate further making Gold all the more attractive. Gold's limited supply, rising demand is only adding fuel to the fire. And with the Marriage Season on in India, the World's Largest consumer of Gold, Gold seems to be only on one direction, up.

Instead of buying Gold Directly with its associated quality risks, you have the option of Buying Gold through Gold ETFs. Here you do not face the problem of either Storage Risk or Quality Risk as the Gold is bought and sold in Paperless Form. And moreover, it is tax efficient too.

Apart from Gold ETFs, you have the option of investing in Gold Equity Funds like AIG World Gold Fund and DSPBR World Gold fund, which invests in stocks of Gold Mining Companies worldwide. These Funds, however, tend to be more volatile compared to Gold as their fortune also depends on the Equity markets. And, as they invest overseas, they also face Currency Risk. Thus, invest in these Funds, only if you ready to ride out volatility. These Funds are for Medium Risk-Medium Return type of Investors. For others, there is always Gold ETFs like UTI Goldshare, Reliance Gold, etc.

Best of luck,
Srikanth Shankar Matrubai,

Also visit for an indepth Equity Analysis

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