Digital gold can be an ideal option in 2022

Although investing in the stock market seems like a lucrative option, it brings a set of high risks caused by frequent fluctuations. The growing instability brought on by Covid-19 as well as Russia’s invasion of Ukraine are recent incidents that have caused turbulence in the market. This has left investors worried, who are on the lookout for channels that can provide them with high returns and at the same time offer them security even when inflation is sky-high.

Is there a solution in sight? Of course, gold has been considered a dependable option for several decades now. In fact, it isn’t just physical gold that is in demand; digital gold is becoming increasingly popular, both for its portability and affordability. Further, with the digital revolution sweeping India, and several market players, such as Airtel Payments Bank, offering gold digitally, this is the go-to investment option today!

Before we focus on the benefits of digital gold, let us first understand how gold has historically performed during high inflationary periods.

Can gold hedge risks related to inflation?

We are already aware that investing brings on certain challenges, including inflation. In such cases, in case an investment does not beat inflation, it can be worrisome. When it comes to gold, there is enough evidence to validate that it has performed well the world over, even during peak inflation.

As per an International Journal of Research in Management and Technology paper, in 1946, 1974, 1975, 1979, and 1980, when inflation was skyrocketing in the US, the average real return on stocks was -12.33%; gold stood at 130.4%. Back home, from 2018 to 2020, Nifty50 was at the centre of extreme volatility and recorded a CAGR of 10%, while gold had a CAGR of 19% in the same period.

Does this mean that gold serves as an inflation hedge? The answer is yes. As per the India Gold Market report by World Gold Council, for every 1% rise in inflation, the demand for gold in India soars by 2.6. This makes it critical to diversify your investment portfolio and have gold in the mix to the tune of 10-20%.

There’s also more research that goes on to show that over the last three decades, gold has proved to have an annualised return of 10%, while in the last decade, the annualised return from gold has been 11%. All in all, gold not only serves as a hedge against inflation but is also a good option for long-term investment.

Is digital gold a lucrative option?

There has been a lot of buzz around digital gold, but is it a good idea to invest in this channel? The answer is yes. The good news is that you can buy this asset from the comfort of your home, and it is stored in insured vaults by the seller. An individual can easily engage in buying or selling 24 karat Hallmark gold for as low as Re 1.

How safe is it? Platforms like SafeGold that have partnered with Airtel Payments Bank help customers buy, sell and receive gold at all times and at affordable prices, without any hassle. What’s more, digital gold is far more convenient and functional because, unlike physical gold, you do not have to incur any making charges. Plus, storing gold at home is a high-risk option!

In a nutshell, convenience, authenticity, and liquidity are a few big reasons customers choose to invest in digital gold. Also, digital gold can be used as collateral for online loans.

DigiGold: The option you should consider

Now that we have understood the benefits of investing in digital gold, the bigger question is, where to buy it from safely? Airtel Payments Bank is here to your rescue. When you become a member of the bank, you can get access to 24K 99.5% pure gold offered by SafeGold, with a complete storage facility in the Brinks vault. What’s more, you can buy gold at your convenience at an affordable price of Re 1. Last but not least, you can buy, sell or receive gold at any point at internationally competitive rates. If it’s a festive season or a special occasion, or a milestone, you can gift digital gold to your loved ones and make their special day even more special.

Courtesy: Live Mint