Physical gold as part of portfolio?

I don’t see anyone recommending physical gold as part of someone’s portfolio. Do you think a % of your portfolio should be invested in physical gold, if yes, how much %?

In rare events where on paper wealth becomes useless like stocks in Demat account, SGB, real estate property etc. Thoughts?

Many Americans also prefer to keep guns at home for such cases (invasion etc). The on-paper wealth system has not been tried and tested for more than a few hundred years. It is still new.

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Physical gold as part of portfolio can be there. Gold have different forms in which it can be held, you can hold some gold in physical format and some in digital format. This way your gold holdings will also be diversified.

I prefer gold at least 10% of your networth( all asset combine) in physical form -

  1. Gold as an asset has survived thousands of years and is the global currency. Its is super liquid asset in any part of the globe and everyone recognize it .
  2. Its the only risk management option in case of War, Countries financial crisis ,Bankruptcy , Hyperinflation etc in-short any event which can jeopardizes your countries existence or crisis . Asylum seekers,Refugees have gold as there lifeline , i read in one of the study.
  3. When you have physical gold you won’t sell it that easily so its act as piggy bank and ultimate line of financial defense.
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There are multiple reasons why Digital Gold is preferred.

  • Returns on Digital Gold is more than Physical Gold. Instruments like SGB give 2.5% Interest over and above the price appreciation.
  • There is no defined minimum amount for investment in Digital Gold. You can start as low as Rs1 and transactions can be done any number of times, hence this is preferable for Small Investors and salaried persons.

  • Safekeeping of Physical Gold is difficult for somepeople and hence they like to get rid of risk of theft.

  • The ease of Buying and Selling is what attract the majority.

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I don’t think that physical gold should be a part of your portfolio. And overall return of this is very less. Even though our household demand of gold is high, as today also women likes to wear gold jewelry. But with the rise in destination weddings, demand for imitation jewelry is increasing. So, if someone wants gold, either go for Gold ETF …which is a better option for investment and also there is no making charges involved. At the time of your son/daughter wedding, you can sell this ETF and can buy physical gold jewelry.

Deepak Shenoy had a good podcast on this. Apart from discussing various way to invest in gold, he also discusses in events like war, when traditional wealth is difficult to carry, what things can be useful store of value.
To quote him, “it is better to store gun rather than physical gold in times of war. Because if you have gun, you can easily take someone’s gold” :slight_smile:

Worth a hear

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Is physical gold is safe , well nope.

If you had physical gold in hand in your house. Just how exactly are you going to use it to pay rent. Plus during crises I just don’t think you would even have house so how exactly would you have gold? Anything and everything can happen .

If you had physical gold in locker such as banks. Heck no, banks and governments have enough power crazy levels of power to open your locker and use the gold during crisis. Just look at TN state govt we had temples that insane level of gold ornaments. And guess what happened the state govt took all the ornaments majority of them and gave it bullion market to melt them to gold bars and monetized their debt. If temples arent safe just how safe would be bank locker.

Frankly people approach this in a different way. These days they have something called gold vault in offshore safe haven countries. They are lot easier , no taxes liquidity. It’s comparatively less risk than your regulated country gold vault. So they have like 2% physical gold in hand everything else in offshore. They also have deposits In other currencies like CNY and dollars like offshore banking, so when things turn worse all they need to do is cross border and be able to access their accounts.

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I don’t mind adding physical gold to my portfolio. Being an Indian woman, I can tell you that gold is really precious for us and when it is going to work as a long-term investment, I think it’s a great option to go for.

Yep, cuz it’s more important for them to show they are rich ,worthy, valuable to other people they hate than to draw a proper portfolio and have better money management. Emotions and money never mix well.

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If someone’s savings is in multi crore they will need to look for physical gold diversification in their investment portfolio.

If someone’s savings is in lakhs, one should not bother with physical gold as investment, because they will eventually have to liquidate and spend most of their life savings during their own lifetime on short notice for family needs. In such a circumstance it becomes a hassle to haggle around carrying gold from shop to shop in the city to find a the right buyer.

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Middle class women accumulate gold jewelry say up to 100 grams minimum ( 12 sovereign) to wear for occasion & prestige/ image. Not exactly as a investment
Gold goes to 1200$ or 2000$ theyvdont sell. But comes handy to pawn in am emergency if you dont want to borrow freinds & family.Men even accumulate rings chains bracelets etc from they start working / gettting married etc.
Rich people who deal in cash type business ( not abe to deposit black money in to banks ) buy gold in bars ( 10 tola / 100 grams/ 1 kg bars ) they dont care about interest. Bank lockers are not safe. Can be frozen by govt/ income tax etc.
People rich enough not to care about interest or safety buy gold in bars Middle class buy jewelry what they can wear.

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Having gold as part of your portfolio, whether it is physical or digital, is always a good option if you think long term wise. It is the best way to keep yourself secure in tough times. If you’re thinking of adding it, I suggest you do.

In India, the value of gold has special importance. And gold as a part of one’s portfolio isn’t a bad idea. But it is not the reason why you should invest in gold. You may consider diversifying your investments by taking gold into your portfolio.

When it comes to building a portfolio, you must only add those assets to it that you understand and can handle. If physical gold is among them, I don’t see an issue with it.

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Most people own physical gold in one or the other form and in India, in the form of jewellery, coins, and bars. Over the years, it has proved to be a helpful investment for them.

It is all about what your goals are. Some people will be okay with putting their money in online assets but some people will always be interested in physical things like gold that give them the satisfaction that they own something. I have put my money in physical gold and gold bonds and it works perfectly fine for me.

It is not a bad move as it gives more options