Gold Equity Fund

India
May 15, 2011 11:45am CST
Gold has always been considered a Safe hedge. Equity has proved to be the best Asset Class. Gold however does not give alpha returns and is not very liquid. Equity is very volatile. So, Mutual Fund companies have now come out with funds which combine these two asset classes. What do your feel....should we invest in these Hybrid funds?? Or don't you think it would be wiser to invest in a Diversified Equity Fund and invest separately in a Gold ETF?? This will allow us to increase/decrease our exposure to equity/gold... Dilemma??? Any solutions???
1 response
de_toya
@de_toya (2429)
• Indonesia
16 May 11
I don't understand about Gold equity Funds and I don't want to understand either. I know Gold is good solution for investment because Gold is not influenced by inflation. Gold price increase about 30% every year. This is higher than inflation in my country. Furthermore, gold is very liquid. Different with property, gold be able to convert to money easily. I prefer buy gold instead of save my money. Whenever I need money, I will sell them.
goodfundadvisor
@goodfundadvisor (671)
• India
16 May 11
Understanding or not understanding Gold equity funds is left to you. While I do agree Gold is a good investment, I do not agree that Gold increases by 30% every year. If it was so, every single investor would have invested only in gold and nowhere else, not even Real Estate. Gold has been in super bull mode for the last couple years only. In fact, Gold has still NOT reached the levels of its price in 1980(inflation adjusted)., which means, if you had invested Gold in 1980, you would still be sitting in losses, even after 31 long years. So, do not have so much blind faith on Gold. After all, Gold has no usefulness apart from ornamental value.
de_toya
@de_toya (2429)
• Indonesia
18 May 11
Yes, I was wrong. You are right. Gold prices is not increase by 30% every year. However, Gold investment is better than just save our money in the bank. Currently, Gold prices tend to increases even though the increment is lower than property or land. I invest my money in Gold bullion with finest 99.99%. The prices is lower than jewelry because no production costs. I have some jewelry as well.