Wealth management and investment advisory expert Anil Rego, in an online chat on October 26, answered readers' queries.
For those who missed the chat here are the chat transcripts.
Ashok: WHAT TO SEE BEFORE BUYING GOLD @ DHANTERAS?
Anil Rego: Look for the best rates available, the quality of the gold in terms of carats and obviously the making charges, if you are going for gold ornaments.
pankaj ajmera: should i buy gold 99.50 @current price today? or should wait?
Anil Rego: You can buy at the current price; but preferably via ETF or gold bond route and hold it for long term.
Nitin Badesha: If I have Rs 5 lakh to invest, how much of this shall I invest in gold?
Anil Rego: max 5-8 per cent. i.e. 25-30k. But invest either via ETF or gold bonds.
bhanu: The gold prices are around Rs 30,000 now. Where do you think they are heading by next Diwali? Buying-Gold-On-Dhanteras
Anil Rego: We expect gold to go up further as we expect market to be volatile in medium term.
We expect gold prices to go up for following reasons 1. demand is higher than the supply - in the last few years, miners stopped new production 2. Post Brexit, the European region has lot of concerns on economic performance 3. China's raising debt levels is a concern 4. Japan's hope of recovery is still not visible 5. Equity markets are volatile; there is no alternative to yellow metal currently
Rajan shah: Is there a way to buy gold on dhanteras at cheaper rates? Buying-Gold-On-Dhanteras
Anil Rego: Some Jewellers claim to offer better rates; but actually, it may differ on the gold quality and making charges. So look for the one who gives you a better rate on these two parameters
Satish Pulli: Is buying a gold coin better than buying jewellery?
Anil Rego: Yes, since there are no making charges, it makes much sense to the gold coins and when you want to convert it into the jewellery, you can claim lesser making charges.
Amol chille: Since gold is so expensive, should you buy gold coins or go for ETFs?
Anil Rego: ETF is preferable as it helps you to buy in small quantities...
Vinay Shukla: I want to sell gold during dhanteras and invest the money thus obtained in SIPs. Your advice
Anil Rego: You can but ensure not to take big amount of money from SIPs and also ensure the money taken out is not attracted or less attracted to tax.
Dawar Sheth: Do you think gold prices will ever fall to 20k-25k in India?
Anil Rego: No we dont think so; due to the reasons I have mentioned in my one of the previous answers
Anil Rego: [SKB] We expect gold prices to go up for following reasons:
1. demand is higher than the supply -- in the last few years, miners stopped new production
2. Post Brexit, the European region has lot of concerns on economic performance
3. China's raising debt levels is a concern
4. Japan's hope of recovery is still not visible
5. Equity markets are volatile; there is no alternative to yellow metal currently
RAJESH JAISWAL: IS IT RIGHT TIME TO PURCHASE GOLD?
Anil Rego: You can buy gold now; but invest systematically over the period as it helps in getting the benefit of average cost
randeev mehta: Why just Dhanteras? Why not invest in gold every month like one invests in SIPs every month?
Anil Rego: Yes. You should. However, buying gold during Dhanteras considered as auspicious..
mustafa: Is there any better options, especially among other metals, to buying gold this dhanteras?
Anil Rego: As I mentioned in one of my previous comments, so far we havent seen a replacement for the yellow metal. The history goes back to many civilisations and it always been a last resort during the period of depressions and deflations
Anil Rego: I have answered this question already... please refer to that anaswer
sameer sethi: Does investing in gold bonds offer any tax benefits?
Anil Rego: Capital gain tax on redemption of Sovereign Gold Bonds to an individual is exempted. Indexation benefit can be claimed if the bonds are transferred
Gajanan Bose: Why this craze for buying gold on dhanteras?
Anil Rego: Dhanteras day is considered as among the auspicious day for buying gold as per Hindu mythology; it is believed that buying gold on that day increases the wealth of the purchaser. Hence the craze, as we think..
Anil sood: What you advice either invest in ETF gold or SIP for 2-3 years?
Anil Rego: Equity fund SIPs and gold ETF go hand in hand. Invest only a small portion in gold and rest in equity and other mutual fund SIPs. Gold is an hedge and use it accordingly.
Arindam Paul: how much a person can purchase gold, every year?
Anil Rego: There is no limit as such. But as an advisor we suggest to not have more than 5-8 per cent of your overall assets in Gold.
PRASHANT MADAN: Should one be trading in commodity market in Gold. Your thoughts on gold prices in a three months horizon.
Anil Rego: We don't provide trading calls; we advise on achieving financial goals and hence from that perspective one should have at least 5-8 per cent of gold investments in his/her total financial assets.
neetu chaubey: How to know that the gold that jewellers sell is 99.1 per cent or 99.5 per cent pure or is of 22karata, 23karat or 24karat? Jewellers often sell jewellery saying it is 22karat but when we resell it to some other jewellers they say there are lots of impurities and so won't be able to give good value for the deal?
Anil Rego: You will get a certificate from BIS -- it is called as BIS hallmark certificate. This ensures the quality of the gold that you have bought.
Manik Gupta: Gold vs equity vs mutual funds? How should one divide her investment, say Rs 20,000 monthly, in each of these assets?
Anil Rego: 1000-1500 in gold is advised. The investment in equity or mutual funds should be invested based on your risk profile. Please talk to a good financial advisor and he can help.
Farhat Contractor: Hello, I'm Siddik from Mumbai. I'm interested trading of Physical Gold through Internet. What are my options Sir. Thanks
Anil Rego: Buying and selling gold via internet is not advised as we still don't have effective systems in place for trading the physical gold online.
dhiren mehta: who is the price maker in world gold market?
Anil Rego: It's the demand and supply; but mostly by traders who operates across the globe and take positions in the gold based on the market conditions
Farhat Contractor: Also SEBI was mooting the plan to launch Physical Gold Trading Exchange like BSE/NSE, what's the status of that?
Anil Rego: It was bullion association which was contemplating for setting up a physical gold exchange in collaboration with BSE last year; we don't have any new update on that as of now.
Anil Rego: Thanks for all the questions and hope you got your answers. I am closing the session with this message. Thanks again
Photograph: Shailesh Andrade/Reuters
