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Topic : Investment options In India
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Started by : Padmanabhan R, Articled / Audit assistant, Finance student   06 13 2009 11:45:15 +0000
Functional Area : Personal Finance(Personal Interests)
Keywords : gold
Activity:  16 views;  last activity : 07 06 2010 20:18:09 +0000

 
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1 Gold never a long term option

Gold never a long term option

idea posted by Padmanabhan R Articled / Audit assistant, Finance student

 Gold is an option for hedging rather than return generation. Unlike stock, investment in gold can never go below it’s cost and is the most liquid tangible asset in existence and have very low price volatility. But gold is never an option for long term gains. Just compare the growth of any stock index with that of gold. Even Warren Buffet said gold is one of the most useless investments.

Other than its ornamental value, investment in gold can be justified only for short term. Due to its negative correlation with the dollar it can be an option to park funds during a bear market. During short term there are periods when gold out perform stock. So gold should be considered as a short term option or a hedging option rather than a long term option.

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