Many investors also invest in gold ETFs, which is akin to investing in physical gold
The festive season which usually begins with Dussehra stretches through Christmas and mostly ends with celebrating the new year. Festivals are popular not just for the celebrations that accompany them but also for the auspicious time they carry to begin something new.
For example, the festival of Diwali brings with it the time to make new purchases and investments. The popular belief is that any investment made on this day will grow and multiply throughout the year. So, most of the people make investments in gold, silver, among others.
Regularly investing in precious metals, every year during this special day also helps you in growing and accumulating wealth over a long period. Off late, stepping aside from the traditional definition of investing in physical metal, it is seen many investors also invest in gold exchange traded funds (ETFs), which is akin to investing in physical gold. Apart from investing in gold and silver, you can also go for big-ticket purchases like purchasing a new vehicle and buying a new home. Sale of utensils, gold and silver items, coins and lamps, commonly goes on an upsurge. Additionally, moving house or taking delivery of their new car, is also considered so as to begin the new year with afresh.
It is not just the local markets awash with increasing demand and sales that light up, the exuberance also rubs off on the stock markets. Equity markets are kept open for a small window of time during Diwali usually in the evening, for the traditional “Muhurat” trading. Investors place token orders during this trading session, buying stocks which are sometimes retained for a very long time. The “Muhurat” trading session is believed to bring in wealth and prosperity throughout the year, to whoever makes investments. The stock markets thus invariably go up a few points during this session, even if the general market scenario is bearish.
This year, you can consider starting a tradition for your family, by gifting something unique. Instead of a ‘Made in China’ toy or other bauble, or even buying a single stock, present each member of your household with a portfolio managed by experts – through a mutual fund. Gift a systematic investment plan (SIP) to each one, with a twist. Let those below 40 have a pure equity fund, those between 40 and 55 a balanced fund and those older an income fund.
With this, you have both diversification and risk management. The young will enjoy the long-term growth that equity gives while the older ones would have more stability with higher debt.
The children especially will enjoy the learning of money and investments in a practical manner. When they would find the investment paying off in the down payment of the house they buy while starting a family, or paying for higher education, or anything precious, the festive season will be a joyful memory.
AS GOOD AS GOLD
- Many investors also invest in gold ETFs, which is akin to investing in physical gold
- You can gift SIP to family members on festivals instead of other gift items
The writer is chief investment officer, LIC Mutual Fund
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