Dhanteras: What To Invest In On the Auspicious Occasion
The festival is marked by buying something made of metal as it is considered the harbinger of good luck
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As Diwali week kicks in, it's once again time to loosen those purses, and make way for festive investments. To start off Diwali festivities, Hindu devotees worship Lord Dhanvantri for money and health and celebrate Dhanteras on triyodasi of the Krishna Paksha (13th lunar day of the Krishna Paksha of the month of Karthik).
The festival is marked by auspicious shopping, mainly gold and silver, to household items made of iron, copper or brass. The main emphasis is on buying something made of metal as it is considered the harbinger of good luck and believed to keep negative energy at bay.
Here are some recommendations this year, old and new, for you to invest on this Dhanteras.
India is the 2nd largest consumer of gold after China, and buyers here attach great emotional value to the yellow metal, other than its monetary value. Let us tell you the different forms of gold related investments you can make this Dhanteras.
- Physical Gold : Most household incomes that invest in gold during this auspicious occasion do it in the form of physical gold. Although returns have dipped on the yellow metal over the years, it is still the one of the most liquid assets.
Physical gold can be bought in two forms – gold coins/bars from banks or in the form of jewelry. To ensure the quality of gold is good always opt for hallmarked products. You can also try 22K gold jewelry being sold by new-age online jewelers like Caratlane, Velevetcase and BlueStone. Be sure to read their purchase and return policy, however to get the best return while selling it off.
Caution - Do not invest in gold below 18K as they accrue very low returns and are difficult to sell off.
- Sovereign Gold Bonds : These are quite tough to get a hold of, but if you can nothing like it. These are government securities denominated in grams of gold (1 gram and in multiples thereof) and come with tenure of 8 years. The government has fixed the purchase price these bonds at Rs 2,987 per gram, the subscription for which will open on October 16.
- Gold ETFs : These are open-ended exchange traded fund (offered by mutual funds) which track the price of gold and each unit represents ownership of the gold asset. The returns work in tandem with the moving price of gold on bourses.
- Gold saving funds : Offered by mutual funds, these are fund of fund schemes which invest their corpus into an underlying Gold ETF.
- Digital Gold: This is the latest form of gold trading that can be explored during the festive season. MMTC-PAMP, which started this avenue teamed up with Paytm. Through Paytm Gold, one can invest as little as Rs 1 on 24K 999.9 pure gold and keep making recurring investments in lieu with the market price.
After the import tax for gold was hiked in 2015, silver imports grew to almost 8,000 tonnes, 14% up on the previous 2014. This made demand for gold jewellery, which accounts for 75% of all Indian gold demand, plummet 30% for the year ending September 2016, according to the World Gold Council. Commodity trackers have since predicted a possible shift back to silver as a more prominent investment in the country.
While gold has always been the preferred investment during Dhanteras, experts say, silver will glitter more this festive season. The demand for silver jewellery too has risen, with a growth of over 600% in the last ten years according to a research by Thomson Reuters, indicating that appetite for the metal is unlikely to die out anytime soon.
As buying metals during Dhanteras is considered auspicious, make some big bets on bullish metal investing in commodity stocks. Be wary though, commodity trading is nothing like normal stock trades, so investors with better knowledge in futures and options can consider in this sector. Novices should take expert advice and only then venture into this domain of trading.