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Are Gold Investments Valuable For Your Portfolio Diversification?

Are Gold Investments Valuable For Your Portfolio Diversification

May 10,2023

24 Karat Gold

Are Gold Investments Valuable For Your Portfolio Diversification?

In India's complex cultural history, gold has been a part of everyday life in the form of coins, jewellery, and other objects. Because the precious metal has served a significant role for many decades, it was also a crucial component of royal households. Hence, this illustrates how profoundly Indians have invested in the yellow metal.

Because the tradition of acquiring this precious metal has been handed down via generations, gold is a significant investment opportunity in India. It is one of the few investment options implemented by women in India, regardless of their financial standing. Consequently, the country's demand for gold products, primarily jewellery, remains among the world's greatest.

Moreover, gold investments in India are a safe choice. Additionally, the precious metal has sentimental, emotional, and religious value. Despite various cultural traditions and religious beliefs, gold is used extensively in all traditional festivities, spiritual festivals, and wedding ceremonies. It is treasured and passed down to future generations as a token of affection.

But what about the returns that it offers?

One of the primary reasons gold frequently serves as a haven is that we have all witnessed falling stock prices, but this cannot be in gold's case. There is no credit or risk associated with the counterparty.

In a financial crisis, one can fall asleep soundly if they have enough gold.

Let's understand what returns gold investment offers and whether investing in gold is good.

Should You Invest In Gold?

Gold is an excellent hedge against the possible volatility of equity investments and against inflation in portfolio diversification, which is the primary justification for investing in gold. In the past four decades, gold has generated an average yearly return of 9.6%, with only a few cases of negative returns.

In addition to the returns provided by gold, the reality that it has consistently shown less volatility compared to equity investments throughout the long term is a key factor in its use as a hedge. It has often exhibited an inverse correlation with equities, meaning that historically, gold returns tend to be higher when equity markets suffer loss.

Also Read :- What is the safest investment with the highest return

Why Should You Invest In Gold For Portfolio Diversification?

If you are looking to diversify your portfolio, here are a few reasons to do so:

1. Gold is money

Even though gold is not currently used as a currency, its function and high liquidity render it superior to all other currencies. Moreover, gold has been a currency earlier than any other.

2. Gold is highly liquid

This is an important motivation to invest in it. Gold is readily available for purchase and sale whenever desired. It is a tangible asset with the highest long-term value of all currencies and commodities globally. Moreover, one can use gold as collateral for loans.

This has grown increasingly convenient since introducing Digital Gold to the globe. This option has simplified and streamlined the process of purchasing and selling gold. With a couple of clicks - anytime and anywhere - you have your money in your account! It is also completely secure.

3. Savings available from Re 1

Regardless of your financial circumstance, gold investors can continue to save. With various micro savings applications available on the market, users can begin investing in gold with just Re 1. They may select how much money to invest in gold daily, weekly, and monthly. Also, each rupee accumulates over time, and one can accumulate a substantial quantity of gold.

4. Helps with wealth creation

Gold is a precious metal, as is common knowledge. It holds a special position in each Indian home and is a family treasure. Furthermore, gold investment has the dual advantages of reducing risk and generating wealth. Even without a financial crisis or geopolitical tension, valuable metals can generate respectable long-term returns. Gold as an investment offers the ideal hedge towards equity capital losses after a financial or political upheaval.

Also Read :- Solve Your Money Problems With Your Discarded Gold

How Much Gold Should Your Portfolio Have?

Your portfolio should be arranged to help you achieve your long-term objectives. Gold may have a role. However, many experts caution that you should be cautious about the amount of gold in your portfolio. A good rule of thumb is to allocate at most 5 to 10 per cent of your portfolio towards gold. According to your current situation and risk appetite, you may be safer with a larger or lesser gold allocation in your portfolio.

How To Find Gold Jewellery Buyers In Delhi?

As stated earlier, gold is highly liquid. Hence, in case of any emergency, if you are searching for the best place to sell gold, then 24Karat is one of the best places. With 100% accurate gold evaluation, fair prices, and get instant cash against gold , you don't have to look for how to find gold jewellery buyers in Delhi.

Also Read :- How Do I Get a Good Deal from Buyers of Gold?


Gold can be an excellent supplement to your portfolio if you understand why you're including it. Moreover, it may assist you in achieving your long-term financial goals.