Equity vs Gold: Which is Better Investment for Diwali?

Investment in Gold

Gold is one of the most traded commodities during the festive season. Buying physical gold, i.e. Gold in the form of jewelry or coins is considered auspicious in the festive season and therefore the sell is on boom especially on special Muhurtas. People wait for the whole year and prefer buying Gold around Diwali. As a result, the Gold prices are on a high streak.

Investing in Physical Gold also attracts various charges, the most common one is the making charge. All the jewelers charge a making charge of 5 per cent to 20 per cent on all gold jewelry above and over the value of gold. However, in case you plan to liquidate your physical gold, you are only paid for the value of Gold. It means that you lose a substantial amount in the form of making charges. Also, the risks of burglary are evident with physical Gold.

You can invest in Gold in the form of E-Gold, ETFs as well as Sovereign Gold Bonds. It must be noted that gold has crossed the level of 56,000 last month for the first time in history. Gold prices have surged 26 per cent this year from January till date and all these factors make Gold one of the most potential investment instrument this Diwali season.

Investment in Equity

Stock market is one of the most sough after platform for investment which has been attracting traders and investors for years. This year can be very crucial for the markets. A seeming demand revival is expected in the festive season followed by the measures to boost economy by the Government and RBI. The impact of corporate tax cuts will also be seen on the earnings.

It is expected that FMCG, automobiles, infrastructure and consumer durable sectors will perform well, due to the consumption revival and impact of transmission of the low cost of interest. However, investing in the stock market is not an easy task and requires immense knowledge about the markets and experience.

Market Neuron is a product which helps you invest in the market by helping you in selecting the perfect bouquet of stocks for your investment portfolio. The stocks are based on qualified research and revolve around a particular theme or strategy.

Where Should You Invest

Choosing the perfect investment instrument depends a number of factors. The most prominent ones being your investment capital and investment horizon. Another important factor which is often ignored by the investors is your risk profile analysis. Risk profile analysis helps you in identifying the amount of risk you are capable of taking in the markets. Based on your investment horizon, investment can be classified as short-term investment and long-term investment. Let us discuss about the suitable investment option for you based on your investment horizon.

Long Term Investment: IF you are planning a long-term investment which means that you are aiming long term goals of 1 year or more, investing in stocks with Market Neuron can prove out to be a good option for you. The stocks are selected based on the concept of sentiments of customers. There is a splurge on apparels, gadgets, automobiles etc. during the Diwali season and thus this time proves out to be a major chunk to the annual sales of subsequent sectors.

The current volatility of the market may be a factor of worry for you, but these are short term losses which are expected be overshadowed by the gains in a span of few months. Therefore, if you are planning to invest your funds for long-term this Diwali, investing in equities can be a perfect bet for you.

Short Term Investment: If you are planning a short-term investment, which means that you will need access to your invested capital soon, investing in Gold can prove out to be a good opportunity for you. The reason for this being the current volatility of the market. The markets are highly volatile these days and are expected to remain the same with severe ups and downs considering the prevailing Covid-19 as well as the upcoming US elections.

Gold is trading at all time high prices in 2020. Gold has crossed the level of 56,000 and is expected to show a hike of 10 per cent to 15 per cent in the upcoming few months. Gold prices are expected to touch the level of 65k because Diwali season had always been beneficial for Gold. The prices may decline thereafter, therefore Gold can prove out to be the perfect short-term investment option during this festive season.

Considering the current economic situation, it is recommended to earn while others spend. Instead of spending in unnecessary expenses, you must use those funds in securing your future by planning your investments. If you have not planned any investment, you should do it right now, because the earlier you start the better you get. If you are still confused, a certified investment advisor can help you plan your investments effectively.