Like Karl Marx put it, “Although gold and silver are not by nature money, money is by nature gold and silver.” At the end of the day, bullion is more important than the billion.
Gold SIP are the simplest and the best way of investing in the yellow metal
It took all of 16 years for the Sensex to reach 10,000. The next 10,000 points were done and dusted in just 18 months.
The market keeps telling us: “Don’t try to predict me. I am smarter than all of you put together.” But, we never give up on this futile exercise.
As an investor, I have come to believe the market is like a classroom where we are taught lessons. The same lesson is taught over and over till it is learnt well, and then, we move on to the next classroom, for another lesson.
Successful investors are those who learn the most lessons along their investing life.
Having learnt mine, I won’t be presumptuous again to predict where our stock market is headed (I don’t want to remain in the same classroom). Instead, I am going to dig my heels in, stay invested in quality stocks and mutual funds and enjoy the ride.
I will keep my SIPs going so that every dip is taken advantage of automatically. And yes, I will keep a watchful eye on the bad moons on the horizon.
Fact is, in spite of the 20,000 milestone, there remain many unsettling issues.
The price of crude oil has crossed $90.
It’s not as if I am being a pessimist. However, going forward, the only certain thing seems to be that there would be a lot of uncertainty. And what do prudent investors do when times are uncertain?
They turn to the ultimate safe haven - gold. “Nothing beats a little cash in a bear market and the oldest form of cash is gold.”
This is not to say that we would witness a bear market — if anything, we are in the midst of the mother of all Bull Runs. And the mother of Bull Run is yet to come.
However, when markets are erratic and times are unpredictable, the wise thing to do is to step up exposure to an asset that would infuse a semblance of stability and strength in the portfolio.
The simplest and best way to do this is to invest in Gold with the benefit of SIP.
In other words, a Gold Fund SIP is just like any other mutual fund scheme - the only difference being, instead of being invested in equity shares, the monies collected are invested in gold.
A change of mindset is needed and it shouldn’t really be that difficult, given that we already own other equally valuable assets in a similar form.
Think of the money in your bank. Whether you have Rs 10,000 or Rs 10 lakh or over a crore, the physical cash is not lying in your safe — your bank passbook indicates the amount you own.
This investment is essentially a hedge against inflation and its quality of negative correlation with other asset classes like stocks, fixed income securities and commodities during uncertain times.
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