Team-BHP - Investing in Gold ETF or physical Gold

Gold ETF gains come under short term capital gain rt? So min 15% tax on the gain. I have not started investing into gold as of now but then my friend always prefers to buy gold in 24 cr form and sell it off to the same vendor. There is a diff of 200/- per 10g between buying and selling price. This is the only thing which goes out from his profit. I have seen him buying 20g of gold at 12.5K per 10g and selling it off at 21K per 10g. No tax, nothing.

Quote:

Originally Posted by rk_sans (Post 2345143)

Guys,
any answers on the above question as i have the same question.

The main criteria to select the best fund is the annual returns. However in case of gold the returns are almost same for the most the Gold ETF's. Even the other charges are also similar. The choice is yours. Hope this helps.:thumbs up

Please check the following link to see the retruns of Gold ETF's:
Mutual Fund :- Mutual Fund Investment, Performance, NAVs, Returns Calculator, Compare funds

Quote:

Originally Posted by rk_sans (Post 2345143)

Guys,
any answers on the above question as i have the same question.

Some of the key points while choosing any ETF
1. Choose a Gold ETF which most traded on the exchange (NSE & BSE)
2. Choose a ETF which has returns closest to the returns of the underlying gold

Cheers
Siddharth

Quote:

Originally Posted by ghodlur (Post 2345085)

The only drawback is I cannot do an SIP in ETF which if in place would have been a great boon to the investors.

You can now! A number of mutual fund schemes have been launched by Quantum MF (Quantum Gold Savings Fund), Reliance MF (Reliance Gold Savings Fund), Kotak MF (Kotak Gold Fund), etc. These are either FOF's (Fund of Funds schemes) or similar to your usual equity/debt MF's and you can setup a SIP for a fixed amount just like any other MF. Cheers!

Just one thing to be kept in mind! All of these schemes invest in Gold ETF's and some of them charge additional Fund Management expenses on top of the expenses charged in the ETF. IIRC, only Quantum MF's scheme is the one which doesn't levy any additional expense over and above the ETF expenses.

Quote:

Originally Posted by neoonwheels (Post 2345263)

The returns are liable to tax depending on the duration of investment. That's another matter no one cares about it!

Gold is considered as a save bet to beat inflation. So it makes more sense to invest in gold now. With ETF being the preferred choice.

But at the same time gold is also considered as the biggest bubble.

But I personally believe gold will trend further as long as the US economy gains traction, which doesn't seem to happen soon.

Quote:

Originally Posted by Abeer (Post 2345731)

I checked Mutual Fund :- Mutual Fund Investment, Performance, NAVs, Returns Calculator, Compare funds but was not able to understand what to look for in the list of funds mentioned in there.

If you look at the performance of the top seven funds (which are all Gold ETF's), there is a neglegible difference. What this tells you is that being passively managed funds, the returns are not varying between different funds and you can go ahead and invest in any one of them without any worries over which is the best of them. Just check average daily volumes on BSE/NSE websites and select one of the funds which has the least tracking error from its benchmark.

Quote:

Originally Posted by download2live (Post 2345049)

But isn't the whole point of buying gold is to avoid Market volatility? Atleast that is the only thing which makes me think of gold. Market is run by people who have lot of inside information which we will never know. I do not want to trust them blindly. I do not want any Fund manager reduce my whole life saving to worthless paper. I do not want to suffer because of his mistakes.

Going ETF way somehow makes me feel that we are letting the same unreliable market force a foot in the door.

Quote:

Originally Posted by joslicx (Post 2345011)

I think the best approach would be to buy ETFs with your white money and solid gold (bars) with your cash money (if you have some!) This solid gold can act as a hedge against unnatural circumstances like e.g. currency losing its value or destabilization of the country etc. On the other hand ETFs will act as asset accumulation leading to wealth creation.

Exactly my thoughts.
I personally would put my money in physical gold. Even if the fund tracks the metal price, it is still subject to demand-supply, liquidity on the exchanges as well as other ETF specific risks.
If its purely for portfolio investment then ETF's make sense because of the storage safety and convenience but for securing one's future nothing beats physical gold. There are too many uncertainities which may strike at a time you never expected and paper gold will be just that, paper.
Physical Gold = Global Currency.

Regards,
Ab

What is the opinion of the members regarding GoI Sovereign Gold Bonds.

Though these returns a half yearly interest amount @ 2.5-2.75%, but almost all of them are running at a loss.

I have bought from one such tranche last year, just to 'test the waters'.

Another weird thing from ICICIDirect, they do not allow to trade these gold bonds in secondary market, at least till now.

Fordday.

^^^^^^
Always physical gold. Most people, including me, invest a small part of our savings in gold for that ultimate rainy day; for children's weddings, for the grandchildren's generation who may not do so well and so on. It isn't, in my eyes at least, a financial investment that must yield a
10% pa CAGR return. It's value lies in simply being there, being a universal currency that will work in times of catastrophe and an asset that always tracks inflation give or take a little.

The problem with paper representing gold is that it is paper and hence vulnerable to the vagaries of Govt diktat and change of rules. As most of my liquid assets are in paper subject to such Govt rules physical gold represents a safe haven outside this risk.

There are those that believe "gold and silver will be your only life boat" with all the fear that surrounds fiat currency!

I used to earlier follow Jim Sinclair and his opinions more closely. He does make some very valid points in addition to those that come across as no-so-valid!

Surely, might be helpful to have some stashed away in the form of physical gold. I have not bought any e-gold or gold-ETFs, but as a household we do off and on get physical gold in different forms.

This is my humble take on invesing in gold. I am no financial expert.

1.Every investor should keep some part of the the portfolio in Gold - 5-10% is reasonable.

2.Do not invest in electronic/digital gold of any NBFC or private companies.

3.Invest only in ETF or Government bonds.

4.Digital Gold is preferred if Security and access to bank lockers is difficult or if you keep travelling a lot and has not been tied up to a place for job.

5.Physical Gold is preferred if security is not a big trouble and if there are women at home to enjoy the jewelry.

I do have a small part of my portfolio in gold. I have an ETF for a very small quantity. I have three women at home who use gold jewelry. So I invest in the schemes of reputed(no measure for this - we should go by the legacy and even then we might be wrong) jewellers. And I invest small amounts like 5k per month. It matures at about 11 months time. I purchase the jewels less their value addition which is equivalent to buying bullion.

The ladies get the chance to use the jewelry and in case of resale we loose about 1to 2% for impurities etc. If we feel design is old probably have to pay only for value addition on exchange jewels, which rule most jewellers follow.

In the past when some situations demanded selling of gold, we just requested our close relatives to pay us cash and use the equivalent gold as exchange for their purchase. This removed the selling loss but requires little trust among the relatives/friends.