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Thinking of buying Gold this Akshay Tritiya? Read this before you do…

Akshaya Tritiya, also known as Akha Teej is being celebrated this year on 21-APR-2015. IT is considered a very auspicious day amongst Hindus and people start new ventures on this day. Since it is considered that any investment you start on this day would continue to grow many people traditionally buy gold on this day.

I am advising against buying gold this Akshaya Tritiya and here is why. Gold has not delivered in last 5 years at all. It is surprising to see that investments even in debt mutual funds returned more to the investors. Read this blog to find out if the glittery gold is the right investment this Akshay Tritiya.

NOTE: Buying gold to please ladies in your household is not covered as scope of this post

What if you have been buying gold worth Rs. 10000/ per month since April 2010?

If you had been buying gold worth Rs. 10000/- per month since 1^st April 2010 you would have gold worth Rs. 638544/- as on April 17, 2015. Investment in Equity: Mid & Small Cap mutual fund could have given you a value of Rs. 1408509/- during the same period.

This is 2% annualized returns compared to 30% in the Mid & Small Cap mutual fund. A SIP in mutual funds across all categories have beaten gold in last 5 years.

See the table below that summarizes investment in gold with few of my recommended funds across categories.

Investment from 1-APRIL 2010 to 1-APRIL-2015
Amount Invested / Month	10000
Total Investment	610000

Category	Instrument	Value as on 17-APR-2015 in Rs.	Annualized Rate of Return
Mutual Fund: Equity: Mid & Small Cap	Canara Robeco Emerging Equities Fund	1408509	30%
Mutual Fund: Equity: Tax Planning	Axis Long Term Equity Fund	1307943	28%
Mutual Fund: Equity: Large & Mid Cap	Franklin India Prima Plus Fund	1108494	22%
Mutual Fund: Hybrid: Equity-oriented	Tata Balanced Fund – Plan A	1096775	22%
Mutual Fund: Equity: Large Cap	UTI Equity Fund	1034527	20%
Mutual Fund: Hybrid: Debt-oriented Aggressive	UTI CRTS 81 Fund	856987	13%
Mutual Fund: Debt: Income	ICICI Prudential Long Term Fund	835360	12%
Mutual Fund: Debt: Gilt Medium & Long Term	SBI Magnum Gilt Long-term	824825	12%
Mutual Fund: Debt: Liquid	SBI Magnum InstaCash	766810	9%
Mutual Fund: Hybrid: Arbitrage	IDFC Arbitrage Fund – Plan B	765339	9%
Physical Asset: Gold	Gold	638544	2%

Divya (62 Posts)

Divya is a Financial Advisor at DivyaAdvisor.com. She has MBA(Finance) from BIT,Mesra,Ranchi and authorized distributor of financial products listed below. Products: LIC of India, Star Health, Shares and all Mutual Funds Houses in India Others: Tax Free Bonds and Real Estate Advisory