Investment

Is gold the millennial style of investing?

Millennial is a term that has been used these days widely. It refers to the people who are born between 1980 and 2000. This two-decade has seen some massive growth and development in the economy. This has resulted in a radical change in the consumer’s behavior, expectations, consumption pattern, and the likes.

The changing behavior in consumers has resulted in companies adapting to new business strategies.

Also, talking about the characteristics of the generation, it goes on without saying that the taste of the generation is very different from the previous ones.

But what are the differences?

Is it only the lifestyle? Or it is in other segments as well, such as eating habits, or investing preferences. In simple words, millennials seek to engage in all activities a little differently. Be it investing, real estate, gold, dressing, driving, eating, vacation, or any other section, every segment has seen some change from the millennials.

How does millennial invest in gold?

Today, in the 21st century, the millennials are not very fond of physical gold. Instead, they opt for investing in gold via different means such as paperless gold, such as gold funds and Gold ETFs.

Following are the ways, a millennial is exploring the ideas of investing in gold.

Mutual Funds

Mutual funds have been on the rise – all thanks to the kind of returns they have been offering. Mutual funds have been one of the most sought after instruments as it has been beating the inflation in a sustained manner and has helped in wealth creation.

Within mutual funds, some funds invest in gold and the companies that are related to gold, including gold jewelry retailing, gold mining, gold jewelry manufacturing, and the likes. The following are some of the best gold funds an investor may consider investing –

  • Kotak Gold Fund
  • ICICI Prudential Gold Savings Fund
  • HDFC Gold Fund
  • SBI Gold Fund

Check out more about these funds. Download the Tarrakki app today available on iOS and Android and start investing.

Gold ETFs

What are Gold ETFs? These are ETFs that invest in gold bullion. Similar to how an equity ETF tracks an index, a gold ETF tracks gold pricing. ETFs, come with a very low expense when we compare it with physical god where the cost involves making charges, storage charges, and the likes. Also, the ETFs are traded on an exchange, thereby providing a high degree of liquidity.

Nippon India ETF Gold BEES is one of the most popular Gold ETFs available in India.

Why do millennials do not prefer physical gold?

We believe, gone are the days when the millennials used to accept whatever the parents handed over. In today’s world, jewelry stores have one online, and people can buy only the amount they would utilize. A lot of companies have started the option of a try at home, free trial, and exchange offers. Thus, the excess stocking of jewelry, considering it as an investment, is no more the trend.

Millennials do not prefer physical gold as there are multiple challenges with physical gold such as – storage cost, making cost, risk of theft, and the likes.

Price is critical for the millennials

Our previous generation (parents and grandparents) considered purchasing gold on an auspicious date such as Dhanteras, Akshaya Tritiya, etc.

But, how are the millennials reacting to this?

Millennials are more concerned about the price point and consider buying gold whenever the prices go down irrespective of the day on which it is bought. This trend shows a shift in the mindset of the people where price plays a more prominent role than auspicious times.

With an evolving market, millennials demand may go north

We believe there is a shift in the way the millennials are consuming precious metal. The pattern, design, style, brand image, and likes are essential characteristics that are reviving the demand.

Also, we would not be surprised if the paper gold gains share in the portfolio of a millennial against the illiquid real estate segment.

To conclude, we can say that millennials prefer doing things differently. Thus, the demand is likely to rise, but the instrument of investment or style of investing will differ. Introduction of paper gold and particularly schemes such as Gold Deposit Scheme, Gold Funds, and the likes have opened up the avenues of investment in gold for the young minds. For more information on how to invest in gold funds, download our Tarrakki app available on both iOS and Android.

Should you need any other information about how much of your portfolio should be invested in gold (including various forms), feel free to reach out to us at info@tarrakki.com, and we could catch up for a cup of coffee.

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