Since I don't want to buy Gold physically, I was researching a way to buy it on paper. There are reasons why I don't want to buy physical Gold.
- Storage and security problem.
- Purity issues.
- Banks sell gold coins etc. However, there price is much higher than the actual Gold price.
- Another thing is that the banks don't have a buy back scheme yet.
- Wealth tax. (I don't know how much it is but there is probably no wealth tax on ETFs yet)
- Ladies in the house won't allow to sell Gold, even if it's a coin. They like to think about the future generation. I've decided that I'll preserve and pass (to the next gen.) only the things which I've inherited or going to inherit. LOL
So here I was. I looked around and found many options. There are Gold ETFs (Exchange Traded Fund) from SBI, Kotak, Reliance, UTI etc. The beauty of these ETFs is that there price fluctuates according to the domestic gold price in real.
Hence, all of them have given similar absolute returns of 21.5% (as on 21-12-2010) in the past one year. Pefect! A fund manager's dream job would be to land in one of the Gold ETFs. Why shouldn't we start investing some amount in one of these Gold ETFs each month?
I bought my first installment of SBI GETS today. Process is as easy as buying a share through your trading account. Then, let it lie in your DMAT account for few years.
Invest at your own risk.
P.S.- I understand that there are brokerage charges + STT. Please let me know if there are any wealth tax like things for the ETFs if I don't sell it within a year.