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How Do I Invest in Gold Through SIP?

How Do I Invest in Gold Through SIP?
February 27, 2024


Understanding how and when to invest can be tricky. Most people cannot afford to invest large sums often. Instead, they opt for something known as a Systematic Investment Plan (SIP). A SIP allows people to invest small amounts in various funds at regular intervals. For example, you choose to invest INR 500 every month in a SIP. You decide the amount and how often you want to invest. Today, people are using SIPs to invest in gold.

Why Should I Invest in Gold?

Many people prefer to invest in gold instead of stocks or other market instruments. Here’s why gold is a good investment:

  • It’s Safe
    Gold is known as a hedge against inflation. The metal itself doesn’t lose value over time. Instead, when prices rise, the value of your gold increases as well.
  • It’s Not Linked to the Market
    When the market dips, the price of gold doesn’t always fall. There are times when gold prices rise even when there’s a downturn in the market. Remember, gold prices can occasionally fall. But, these short phases hardly ever last more than a few weeks.

How to Invest Your Money in Gold Digitally

In today’s digital economy, you can invest in gold digitally. Here’s how:

  • Gold ETFs
    With a gold ETF, you use a demat account to buy gold. The money in the account is considered equivalent to the physical amount of gold.
  • Gold Funds
    Alternatively, you can invest in gold by buying stocks of gold mining companies. Gold funds or gold mutual funds also cover silver, platinum and other precious metals. You invest with the help of a mutual fund manager.

Investing in Gold Through SIP

It isn’t always possible for individuals to purchase large quantities of gold at one go. So, you can use a SIP to invest a fixed amount regularly to buy digital gold. Many people opt for the SIPoption as it does not require a demat account. Additionally, with a SIP, investors can build up their wealth slowly. They do not need to make large purchases outright. By investing small amounts every week or month, investors can build their wealth at a steady pace.

What Are the Advantage of a Gold SIP?

  • Understanding how to invest your money can be tricky. Many people assume that they need to save up a significant sum before investing. For many people, saving up large sums takes a lot of time and effort. With a SIP, you do not have to worry about large amounts. Instead, you can start small and invest as per your budget and income.
  • Additionally, since a SIP is a periodic investment, the cost of gold starts to average out. Gold prices fluctuate every day. Some months you may buy gold at higher rates than others. In the long run, you could end up purchasing your gold for a reduced rate.
  • Finally, with a systematic investment plan, you can set up an auto-debit with your bank. So, you never have to worry about missing a single investment. The money will automatically get routed to your investment avenue of choice.
  • Should you choose to invest in gold, the digital route is probably the best way to move forward. You can use a SIP to make periodic investments and build your wealth over time. Remember, your asset value will appreciate over time. When you need to quickly liquidate funds, you can sell your gold with ease. Once you create an investment plan, make sure you stick to it. When you remain invested, you will enjoy high returns.
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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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