Indians have a deep relationship with precious metals. We love to buy jewellery even if we shall wear it only once or twice a year. Some people call it a form of investment. Others buy jewellery because they plan to give away to their children eventually. No Indian wedding is complete without gold and silver exchanging hands. Yes, jewellery is big in our country.
But should you really be buying it?
Investment in Gold & Silver:
Statistics show that precious metals are the most stable form of investment and also give an unmatched rate of return. Experts agree that investing in gold and silver is a very safe and profitable bet. Ideally, investment in precious metals should be in the form of bars or coins made from very pure metal. But is buying jewellery the same as investing in these metals? NO. When you buy jewelery, you pay extra as labour charges which you wouldn't be able to claim if you decide to sell it. Also, the metal is adorned with various other items like pearls and stones, which are useless if you try to sell your jewellery, reducing the weight of metal being sold. But don't forget, you paid for the weight of these items at the rate of gold when you bought the jewellery. These two factors make jewellery an unprofitable investment option.
However, if you do want to buy jewelley, try to buy pieces which do not contain any foreign matter apart from the metal. If you buy such jewllery, in the medium-long term you can definitely expect to make profits on it.
Also, if you have children you can buy jewllery as an investment for them. Surely you would want to give your children gold jewellery on their wedding. Buying such a lot of gold in one go would put a lot of financial burden on you. So why not buy it in small amounts over the years?
But if you are planning to buy jewellery purely as a form of investment and hope to sell it off for profits, then DON'T. Buy gold/silver bars or coins instead.