Khota Paisa

Should You Invest In Gold Now?

Posted in General by khotapaisa on September 10, 2009

Looking at the kind of return gold has been giving, I was feeling tempted to invest more in gold. I still feel that gold would go higher and even at this stage it would be profitable in short term to invest in gold. But knowing that my current exposure to gold was sufficient, I managed not to invest in gold any further. Since this investment won’t be towards any of my goals, it would be only be serving my temptation to make few easy bucks. And this is exactly the risk taking attitude that a common investor should avoid.

That said, you can still start investing in gold if (and only if) you plan to invest a small amount for a long time. Rememer that Gold is a passive investment. Hence you souldn’t invest in it to maximise your portfolio return. Gold is a good hedge against inflation. It is the best hedge against disaster. It means that when you invest in gold, don’t do it for returns. Invest and forget. It also offers a good diversification as it has a negative correlation to equity. When equity goes up, it goes down and vice-versa.

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