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Gold & Your Portfolio

There’s NO SINGLE RIGHT WAY to build your wealth! There’s just the right way for you.

Each person’s needs, wants, expectations, family requirements, etc. are different. This means there’s no magic pill you can take on the road to financial freedom and success! There is however, a series of smart decisions you can make in how you approach your wealth-building strategy.

Optimizing your asset allocation is an unavoidable buzzword, so today we’ll jump in right there and look at the best ways to plan for the present and the future!

Step 1: Foundations
You can’t build anything valuable, if you don’t have strong foundations and something that takes care of your needs first.

This is where your first tier of assets come into the equation. You need to be able to stash this all away for the future or a rainy day. These are assets you should not mess around with! You should strongly consider protecting these investments as well!

1) Your Home
a. Protect with Insurance
2) Some amount of cash
a. Plan ahead with long-term wealth planning
3) Medical Expense Planning
a. Protect with Insurance

This takes care of your core needs. You’re securing your home, your health and hedging against unforeseen circumstances and any immediate emergency. It’s not flashy, but this is the perfect first move!

This is where Gold comes in. Take a peek at gold appreciation over time right here (more on this later).

Step 2: How do you make your wealth grow?
Think long-term. Think of the biggest drivers of your financial stability and freedom! Think education and skill set development and think long-term equity investments. With these investments, you should expose yourself to unavoidable market risks and consider taking calculated risks only. It’s this step right here that sets you up for a happy retirement!

1) Education
a. Invest in yourself + Invest in your family
2) Long-Term Equity Investments
a. Invest in companies with strong fundamentals
b. Consider investing in SIPs

This takes care of your long-term wealth generation prospects. Forward thinking and a strong belief in the power of compounding can take you a long way. People who appreciate that little drops of water make the mighty ocean, will truly appreciate the importance of this step right here.

Step 3: Get Rich: Keep Trying, Don’t Keep Crying
This is where you plan for riches and all the luxury items you ever wanted. Do you want to start a business? Maybe you want to take that dream trip you’ve always wanted? Perhaps you want to invest in a slightly high-risk, high-reward stock you’ve been doing some due diligence on. This is where you shoot for the stars and get into activities that give you joy or have a really good chance of making you a pot of money!

Remember: If this doesn’t work out, you still have your foundation and your long-term investments intact! That doesn’t mean you should make rash decisions, but it does mean every now and then you can trust your gut or simply indulge yourself!

1) Slightly Higher Risk, Higher Reward
a. Trust your research and consider different financial investments
2) Start your own Business
a. Invest in yourself and your own idea if you have the commitment and the drive to succeed in a competitive space
3) Indulge Yourself
a. Take a dream holiday with your family
b. Buy something you’ve always wanted but didn’t have the heart to do before

Step 4: Retirement is approaching!
Once you’re here, start converting parts of your savings from Step 2 & Step 3 into income-generating assets. This gives you a steady income when you’re nearing (or you’ve already reached that point) where you’re not actively working anymore. If you’ve done a good job with all the previous steps, you could be quite comfortable here!

So, where does Gold fit in?
Gold belongs in your foundation, just like insurance. In essence, that’s what it is to your financial planning goals! It’s a reliable support investment that always holds its value – something you can rely on in a time of need.

Whatever you decide this amount should be, it should include a component of gold – say 5-10%. Here, you can invest in physical gold, digital gold, Sovereign Gold Bonds and Gold ETFs!

Remember: Investing in gold has always served as insurance for investors at a time of financial, political, economic and even ecological crises. It still holds true in 2019, as investors can benefit from the increasing value of gold by treating it as a hedge against other investments.

· Gold is less volatile than the market, and hence when you adjust for volatility, it acts as a great hedge.
· Gold pricing data supports this idea over the last 30-40 year period
· Gold is essentially a dollar investment (since gold prices are internationally benchmarked), it's also a good safeguard against rupee depreciation.
· The most efficient allocation is often suggested to be between 5-10% of your foundation portfolio according to many financial advisors.

A thumb rule on gold investing is keeping an expectation for a 7-8% annualised return (taking in a 15-20 year range) in INR terms.

That beats your Fixed Deposits, while also diversifies your anchor investment.
See? There’s a lot to love about gold, apart from the gold itself!

To sum things up:
- Plan for your base and foundation
o Take care of your needs first – home, gold, insurance, cash deposits
- Plan for your long-term investments
o Take care of your wealth-building goals next – stocks, mutual funds, SIPs
- Plan for your ‘level up’ attempts
o Take care of your wants and use this amount to aim high – new ventures, personal development and gratification purchases
- Plan for retirement
o Convert assets into income-generators and maintain your standard of living even after you stop working

For more information on how digital gold can help you achieve your financial goals, look no further than!