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 1st 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 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
