How to make best investment in gold?

Any asset class which gives you a return is called as an asset ie, if it carried any financial value then it is an asset. Gold particularly is an asset class which acts as a safe haven, it’s a store of value kind of an asset class.

So you flock towards gold to have returns, you flock towards gold to act as a portfolio diversifier, you buy gold for your income, for insurance against uncertainties. Rightly said war, financial markets uncertainty, geo-political tensions all that are kind of incidents where people would definitely love to have gold in their portfolio and that’s why it is treated as one of the asset classes in part of the portfolio.

Let’s just step back and examine what really happened in 2008. In March of 2008 one of the big US equity firms Bearstones collapsed and that created a huge amount of panic in the global markets with the result that people started moving away from equity, from the debt market etc into gold and that was the reason for the upward spiral in the gold prices.

Now again if you look at July 2008, Lehman Brothers collapsed and that created another huge crisis of confidence globally. The immediate impact of that Lehman Brothers collapse was a ‘sell everything and hold cash’ syndrome. All the banks, the funds, the institutions everybody had only one motivation in mind and that was sell everything and hold cash as an asset. Not even stocks, not even bonds, not even gold.

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