Investing, for some can be a pretty cumbersome task. Surprisingly, many professionals may also confess to being lazy in the “investing” department. Very often investment houses enthuse the dormant investors with a rendition of a very popular slogan, “You are working hard for money, but is your money working hard for you?” It’s the same old story that we hear over and over with excuses founded on busy schedules, daily routines of hectic work and simply put, no time. Many of us are comfortable just knowing that our monthly paycheck sits safely, resting in a bank savings account. Currently, the average savings accounts interest rate(s) are between 4% and 6% but are we really earning that interest? The Inflation Rate (Consumer Price Index) in India has been close to reaching double-digits since 2009. If we were to actually understand the ultimate net return on our savings, we would realize that it’s actually negative!
In India, there are two popular avenues of investment, bank deposits and gold. The annual bank fixed deposit rates for the past year have ranged between of 8% and 10%. Realizing that inflation is in fact eroding the returns does give cause to look for viable investment options. As per the latest World Gold Council report, India, for the first time lost its tag of the world’s largest gold consumer to China, who was reported to have 1,065.8 tons in 2013. The Indian government in order to reduce the large current account deficit, introduced a number of measures last year. These measures are intended to curb the demand for gold, which is one of the country’s biggest imports. However, it seems that this was only an initial check as the demand for gold is expected to be back on the rise this year. While a few see gold as an investment, many consumers merely hoard this commodity, thereby widening the deficit even further. As shared by my colleague, Jodie in an earlier post on Indexology, in 2013 gold lost 28.3%, the most in a single year since 1981, when gold lost 32.8%. Following this event, a recovery period for gold started, which lasted 25 years. If history it set to repeat itself as we have all come to believe it does in some form or fashion, there may be a long recovery period for gold to follow. However, much of this depends on the fundamentals of investing for today and the availability of investment options today which are supposed to make investing effortless and simple. Olympic Metals: Going For The GOLD?!
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