Gold is a favourite investment option because it is highly liquid, easy to maintain, and offers great protection against inflation. With Diwali around the corner, it’s the season for Indians to buy gold for religious and gifting purposes. However, with gold prices crossing ₹60,000 per 10 gm, consumers might be a little cautious about buying gold. While gold is popular amongst Indians, it has additional advantages besides its beauty.
The Significance of Gold in Diwali
Gold has deep-rooted significance in Indian culture and tradition. During Diwali, people buy gold jewellery, coins, and ornaments to invoke the blessings of the goddess of wealth, Lakshmi. It’s a belief that purchasing gold during Diwali brings prosperity and good luck for the entire year. This is because gold provides a sense of security in times of economic and political uncertainties.
Why Should You Invest in Gold This Diwali?
1. Protection Against Inflation
Inflation poses a major threat to investments in the long run. Inflation is the overall increase in prices, which represents a reduction in the purchasing power of money. The return you should receive from savings with a fixed payout might not keep up with inflation. This is why cash savings are a depreciating asset, as inflation will reduce the value your money holds over time.
For example, if you can buy a piece of chocolate today for ₹5, the price of the same chocolate could increase to ₹10 next year. While the price of chocolate increased over the period, the value of that savings remained the same if you kept your savings in fixed investments like cash. Thus, the purchasing power of your money decreased because it couldn’t keep up with the economic inflation. To protect your investments from this, one should diversify their portfolios and choose safe assets like gold, which has proved over time that it can outperform the inflation rate.
2. Liquidity
Liquidity signifies how easily an asset can be sold for cash. For example, money in the form of cash is highly liquid since it can be withdrawn at any time. On the other hand, real estate has low liquidity because it can take a long time to sell your property and collect its cash value. Because of its high liquidity, gold is a popular investment option. It is very easy for anyone today to go and purchase and sell gold without any technical knowledge.
3. Easy To Maintain
The ease with which anyone can keep gold is a significant advantage. If you have invested in real estate, you may have to worry about its security and maintenance, while investment in the stock market requires a lot of technical expertise and knowledge of the market’s daily movements. On the other hand, gold is relatively easy to manage as an investment. All you have to do is store it in a locker at home or the bank and forget about it for a long time.
4. Financial Planning
Gold is an easy avenue for people to start their financial planning and prepare for the future without worrying about the complications of the investment. Often, people get overwhelmed by the complexities involved in the stock market, real estate, or new investment avenues like cryptocurrencies. Gold is a simple and reliable investment option for people of all backgrounds, and it is also a good way to plan for future expenses such as education, weddings, etc.
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5. Easy Collateral
Gold is also a simple way for individuals to obtain credit, as many financial institutions now offer loans against gold. The asset’s reliability and durability make it a favourable collateral for lenders to offer credit against it. Gold can also come in handy in emergency situations to help you get credit quickly and easily so you can deal with the situation without having to worry about arranging money.
Digital Gold: A Compelling Investment Alternative to Physical Gold
Digital gold is a modern, practical, and accessible alternative to traditional physical gold investments. While physical gold remains a beloved symbol of wealth and tradition, digital gold is emerging as a compelling choice for small investors looking to harness the value of this precious metal. It offers a gateway for a broader audience to participate in gold investments while enjoying the benefits of technology and convenience.
Final Words
Investing in gold during Diwali is more than a financial decision; it’s a cultural and emotional choice that resonates deeply with the Indian tradition. As the festival of lights illuminates homes and hearts, the glitter of gold continues to shine brightly, both as an investment and a cultural symbol of hope and prosperity.
About multipl
Investing in gold during Diwali is more than a financial decision; it’s a cultural and emotional choice that resonates deeply with the Indian tradition. As the festival of lights illuminates homes and hearts, the glitter of gold continues to shine brightly, both as an investment and a cultural symbol of hope and prosperity.
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