Physical gold ornaments carry making charges, storage risk, and buy/sell spreads — beautiful to wear, expensive to trade as an investment. Sovereign Gold Bonds and gold ETFs track prices more cleanly for portfolio allocation.
Gold is a diversifier and crisis hedge in many portfolios, not a high real-return engine over decades compared with productive equity. Expect sideways volatility with periodic spikes when real rates fall globally.
SGBs add a small coupon and tax treatment differs from physical sales — read holding-period rules before choosing between ETFs, funds, or bonds.
Over-allocating because “India loves gold culturally” crowds out equities needed for child education or retirement sized to inflation.
Rebalance gold like any sleeve: if it doubles from 5% to 12% of net worth after a crisis rally, trim back to policy weights instead of chasing sentiment headlines.
Related articles
More in Investment
- 6 min read
What is an index fund and why it beats most mutual funds
Owning the market cheaply is a surprisingly strong strategy — most active managers underperform after fees.
- 6 min read
SIP vs lumpsum — when to use which
Time in the market beats timing — but psychology and windfalls matter too.
- 5 min read
What is asset allocation?
How you split equity, debt, and cash matters more than picking one hot fund.