Read on Twitter
90% of my savings were in equity, debt was never attractive! Last few months have taught me the imp of diversification!
Gold - through SGBs was my move on diversifying! Holder since Jan'20 - so far so good!
A
on talk given by @PositiveGamma on Investing in Gold!
(1/16)
Gold - through SGBs was my move on diversifying! Holder since Jan'20 - so far so good!
A
on talk given by @PositiveGamma on Investing in Gold! (1/16)
Link to the here -
MMTC PAMP is where Krishna worked before Setu and he was also responsible for launching Digi Gold at PayTM!
1) Why Gold?
1.1 Diversification - Volatility & Returns not tied to market conditions - diff. from financial assets.
(2/16)
MMTC PAMP is where Krishna worked before Setu and he was also responsible for launching Digi Gold at PayTM!
1) Why Gold?
1.1 Diversification - Volatility & Returns not tied to market conditions - diff. from financial assets.
(2/16)
1.2 Safe Haven - High value asset, easy to transport! Large value - limited space. Liquid and easy to convert to cash across the world.
1.3 Hedge against inflation and currency depreciation! (Depreciation of Rupee is a major factor behind Gold returns in India)
(3/16)
1.3 Hedge against inflation and currency depreciation! (Depreciation of Rupee is a major factor behind Gold returns in India)
(3/16)
1.4 Upside in Tail Risk - Confidence in currencies & financial systems is low, gold can see upside in scenarios like this!
1.5 Upside on Demand/Supply - Constant Demand - Supply is stable!
2) Gold - Indian Context - Better returns compared to other asset classes...
(4/16)
1.5 Upside on Demand/Supply - Constant Demand - Supply is stable!
2) Gold - Indian Context - Better returns compared to other asset classes...
(4/16)
... specially in the last 2-3 years. Gold has done well both in low inflation & high inflation returns. So both real (ex. inflation) & nominal returns have been good!
3) How much to Allocate?
3.1 Diversification/Inflation Hedge - 10-20%
3.2 Tail Risk/Safe Haven - 5-20%
(5/16)
3) How much to Allocate?
3.1 Diversification/Inflation Hedge - 10-20%
3.2 Tail Risk/Safe Haven - 5-20%
(5/16)
4) There has been a rethink on investment in Gold over last year or so - due to Price performance and people looking for reasons of continue performance! Pandemic - Demand for stimulus and easing of rates - currency trust goes down - faith in Gold increases!
(6/16)
(6/16)
5) How is Gold in India Priced?
How are the prices of gold calculated that we see in newspapers, news channels etc.
If long gold in US$ form in London - instead of 41% increase is only 31%, because Rupee has depreciated substantially compared to the $. (3rd Tweet)
(7/16)
How are the prices of gold calculated that we see in newspapers, news channels etc.
If long gold in US$ form in London - instead of 41% increase is only 31%, because Rupee has depreciated substantially compared to the $. (3rd Tweet)
(7/16)
6) Purity of Gold!
(8/16)
(8/16)
7) Gold Investment Options in India
7.1 Jewellery
7.2 Gold ETFs
7.3 Sovereign Gold Bonds (SGB)
7.4 Bullion
7.5 Gold Futures
7.6 Digital Gold
7.7 Paper Gold/Cert. from Jewellers
7.8 Gold Mining Fund
7.9 Overseas Options via LRS
Details below...
(9/16)
7.1 Jewellery
7.2 Gold ETFs
7.3 Sovereign Gold Bonds (SGB)
7.4 Bullion
7.5 Gold Futures
7.6 Digital Gold
7.7 Paper Gold/Cert. from Jewellers
7.8 Gold Mining Fund
7.9 Overseas Options via LRS
Details below...
(9/16)
8) Pros & Cons of Options
(10/16)
(10/16)
9) SGBs is something I like and feel is probably the best instrument if you see GOLD as a long term investment.
9.1 Attractive pricing in Primary (Disc. on Digital Purchase) & Secondary Market
9.2 Annual Interest Component - 2.5% Annual Return
(11/16)
9.1 Attractive pricing in Primary (Disc. on Digital Purchase) & Secondary Market
9.2 Annual Interest Component - 2.5% Annual Return
(11/16)
9.3 Tax Benefits - Tax Free after holding period of 8 Years!
9.4 Liquidity - Less liquid compared to Gold ETFs, hence only good for Long Term Gold buying!
9.5 Govt. Issued and Backing
9.6 Fine Print behind SGBs - 10K Cr. of Govt. Borrowings through SGBs - money used...
(12/16)
9.4 Liquidity - Less liquid compared to Gold ETFs, hence only good for Long Term Gold buying!
9.5 Govt. Issued and Backing
9.6 Fine Print behind SGBs - 10K Cr. of Govt. Borrowings through SGBs - money used...
(12/16)
in funding Govt. deficit! Govt. is not buying Gold for SGB, at the end its a promissory note based on gold prices. Metal lease rates are b/w 1.5-2.5%, so interest offered is based on that! Hence very different from buying Gold Bars.
Instrument not well discovered...
(13/16)
Instrument not well discovered...
(13/16)
... and hence Liquidity in the secondary market is poor. Not being marketed as nicely as MFs, overtime market will deepen over time!
10) Digital Gold - By Digital Gold anytime and anywhere at the same price across the country - Tier 2 & 3 cities have...
(14/16)
10) Digital Gold - By Digital Gold anytime and anywhere at the same price across the country - Tier 2 & 3 cities have...
(14/16)
physical gold prices which are higher than Tier 1 cities - Digital Gold is uniform, Main Purpose-Democratise investment in Gold - low ticket investments as well. Total Cost of buying & selling is 6-7% because of GST & Markup! Risk of platform and digital gold provider!
(15/16)
(15/16)
11) Discussed SGBs & Digital Gold coz of the easier purchase model but below is rating for various options of all gold buying modes according to six criteria!
This was a really insightful talk & I definitely know more now! Thank you @PositiveGamma for this! (16/16)
Fin.
This was a really insightful talk & I definitely know more now! Thank you @PositiveGamma for this! (16/16)
Fin.
Sorry for the Typos
Another Great article I read last week on this topic! https://www.google.com/amp/s/ofdollarsanddata.com/why-is-gold-valuable/amp/
