Purchasing gold has traditionally been a credible investment in India over balancing periods; unfortunately, today such credulous beliefs cause individuals not to make smart decisions.
Some say that it is for alleviating serious crises, while others think that it’s meant only for the elite class. This discourages most investors from even considering adding gold to their portfolios.
Muthoot Exim CEO Keyur Shah addresses why gold continues to be a point of contention between old myths and new realities.
Myth 1: Gold is Meant to Perform During Crises
There is a widely held belief that gold is useful only for investors during economic downturns. History shows that this premise is incorrect.
Keyur Shah says, “Gold is not only a crisis asset. It’s like hedge against inflation as well as stability at the time of fluctuations in stock markets. Essentially, it preserves wealth over the long time and balances portfolio.”
Thus, the golden appreciation is always steady, which makes gold fit only in terms of long-term investing, not just a safety blanket for turbulent times.
Myth 2: Investing in Gold is Not the Same
Today, investors have several choices from which to choose:
- Gold in its Physical Form (jewelry, coins, bars)
- Digital Gold (online platform)
- Gold ETFs & Mutual Funds
- Gold-related stocks
Still, many think that all the above options act the same.
“Physical gold offers pure ownership, but it’s important to consider its need for secure storage. Digital gold and ETFs offer liquidity and trading convenience but are free from such concerns,” explains Shah.
Smart investors will thus diversify according to their financial goals and convenience.
Myth 3: Gold Prices Move Only in a Whimsical Manner
It is common these days, with many of the ascensions of gold prices, to characterize it as an unpredictable and risky asset. However, according to Shah, this is completely untrue.
“Gold would not have the extreme fluctuations of stocks; the value keeps appreciating over decades, so it will be a very stable preserver of wealth,” he avers.
Short-term volatility exists, but on the whole, gold is always heading up, which means it is secure.
Myth 4: Gold Is an Old-School Investment
Some claim that gold is a bygone topic in this new age of digital investment. However, the evolution of this mode of investment into gold ETFs and sovereign gold bonds (SGBs) has kept it up-to-date.
According to Shah, “Instability in global economies and inflation are ever-rising factors contributing to gold’s relevance. For instance, during 2024, gold produced a higher value as compared to several classes of assets, proving its worth in the long haul.”
Far from being outmoded, gold is a timeless investment tied to modern accessibility.
Myth 5: Gold Is Only for the Rich
Investing in gold and the masses think that doing so involves huge amounts of money, making it accessible to the little investor.
“Today, even small investors can purchase gold across SIPs in gold mutual funds or fractional digital gold,” says Shah. “One does not have to put together heavy pieces of jewelry or a lot of money to get started.”
Gold is open for everyone, with offerings starting as low as ₹100 per month.