Gold or Mutual Funds?
As women, we love to show off our jewelry as they define our social status, lifestyle and earning capacity. Weddings, anniversaries or Akshaya Tritiya, we rush to get our favorite ornament made of gold. Why?
We hear our moms and grandmoms say, “Buy Gold, it would help when you are in need of money”. Meaning, traditionally Gold is not just a piece of jewelry but is considered as an investment.
Then why does the business magnate, Warren Buffett, does not invest in Gold?
He says: “It doesn’t do anything but sit there and look at you.”
They say investments in Mutual Funds fetch better returns. Do I choose Mutual Funds or Gold? Which one’s better?
Let me list down the differences between the two, that will help answer the above question and help you to make the right choice.
|Investment in Gold||Investment in Mutual Funds|
|Gold is not affected by market conditions.||Mutual funds are affected by market conditions so there is potential to earn higher returns.|
|The process of investing gold and managing investments is an individual’s responsibility.||Mutual Funds are handled by Professional Fund Managers who perform research and guide your investments in Mutual Funds.|
|Fear of theft or loss of purity is more as Gold is a physical asset.||Mutual funds are invested in stocks, bonds, or Gold ETFs, they are electronic or online investments.|
|Diversification can happen only if one chooses to invest not just in Gold, but in silver, or other mining products.||Mutual funds provide the option of diversification as it allows investment in bonds, cash, or commodities like gold and other precious metals.|
|Value of Gold is more hence the amount you invest in Gold would naturally be high.||Initial Investment in Mutual Funds can be as small as Rs. 500|
|Gold remains to have the same value unless someone buys it at a higher price.||Investments in Mutual Funds earn high returns as time passes. Mutual Funds Providing >15% returns.|
|Gold incurs making charges and wastage||Mutual Funds have no such charges, in fact, investment in Direct Mutual Funds don’t even have commission charges.|