All That Glitters Is Not Gold!

All That Glitters Is Not Gold!

by Mr. B. Padmanaban, CFP^CM

Certified Financial Planner

www.fortuneplanners.com

All that glitters is not gold is a well-known saying, meaning that not everything that looks precious or true turns out to be so. This can apply to people, places, or things that promise to be more than they really are.

Unfortunately, Indians are fond of GOLD and they always felt that GOLD prices keep moving all the times and whenever it comes down, it is good to buy because it will go up any time. It clearly shows that people are more emotional than practical!

My only submission here is GOLD is not at all a good investment and when it comes to ornament, it is the individual wish to buy or not. No comments! The reason for telling me is not a good investment, I have given the gold prices data for the last so many years and one can easily find out whether it is really moved or not! You are the best person to judge based on the data given below.

Year	Price	Year	Price
1964	Rs. 63.25	1991	Rs. 3,466.00
1965	Rs. 71.75	1992	Rs. 4,334.00
1966	Rs. 83.75	1993	Rs. 4,140.00
1967	Rs. 102.50	1994	Rs. 4,598.00
1968	Rs. 162.00	1995	Rs. 4,680.00
1969	Rs. 176.00	1996	Rs. 5,160.00
1970	Rs. 184.00	1997	Rs. 4,725.00
1971	Rs. 193.00	1998	Rs. 4,045.00
1972	Rs. 202.00	1999	Rs. 4,234.00
1973	Rs. 278.50	2000	Rs. 4,400.00
1974	Rs. 506.00	2001	Rs. 4,300.00
1975	Rs. 540.00	2002	Rs. 4,990.00
1976	Rs. 432.00	2003	Rs. 5,600.00
1977	Rs. 486.00	2004	Rs. 5,850.00
1978	Rs. 685.00	2005	Rs. 7,000.00
1979	Rs. 937.00	2006	Rs. 8,400.00
1980	Rs. 1,330.00	2007	Rs. 10,800.00
1981	Rs. 1,800.00	2008	Rs. 12,500.00
1982	Rs. 1,645.00	2009	Rs. 14,500.00
1983	Rs. 1,800.00	2010	Rs. 18,500.00
1984	Rs. 1,970.00	2011	Rs. 26,400.00
1985	Rs. 2,130.00	2012	Rs. 31,050.00
1986	Rs. 2,140.00	2013	Rs. 29,600.00
1987	Rs. 2,570.00	2014	Rs.28,006.50
1988	Rs. 3,130.00	2015	Rs.26,343.50
1989	Rs. 3,140.00	2016	Rs.28,623.50
1990	Rs. 3,200.00	2017	Rs.28,130.00
	1980	2017	Multiply by
Sensex	100	31,671	316.71
Gold	1,330	28,130	21.15
	2012
Sensex	18,869	31,671	40.42%
Gold	31,050	28,130	-9.40%

As far as data goes, it is not encouraging and let's look at how the future returns will look like. I agree with you all that in our social life GOLD still plays an important role. But the point is do we should accumulate only in terms of gold, or it can be some other investments which should be in a position to buy the GOLD which we require it in the near future, hope that makes more sense to one and all.

Internationally GOLD is bought against US dollars. Gold is measured by Troy Ounce and it is 31.1 gram, for the calculation purpose we will take 32 grams or 4 sovereign. The question, I leave it to you all is what would be the currency gain going forward. Considering make in India and other initiatives as far as my reading goes it will not reach 70 in the next 5 years and chances or rupee strengthening is higher and you have every right to make your opinion on that. Opinion reserved for you.

It clearly shows in the international market GOLD price will not move for decades. Considering the current situation it is difficult to buy GOLD through cash, so things will never look like what we had in the past.

Gold Price
Year	1 Troy Ounce	31.1 Grams
1980	$892	Rs. 8 per $
2000	$272	Rs. 48 per $
22-08-11	$1,917	Rs. 45.57 per $
04-10-17	$1,283	Rs. 65 per $
6 Years	-33.07%	42.64%

In the last 5 years, it has given negative returns but how many know this fact, even if I tell you still many will not accept! Take 10 years or any long term it proves not a great investment. On top of it protecting GOLD is not that easy as well.

Let’s look at the other investment avenue like mutual fund which can eventually generates good return though we don’t know much or we don’t like much. Just because there is a statutory warning everyone fears about Mutual Fund.

MF investments are subject to Market Risk, read the offer document carefully before investing!

All the investments are market risk like GOLD, Real estate. Even our bank interests also subject to interest rate risk. Many could not find an opportunity to reinvest what they had invested few years before. But, they never told about the risk, we consider it is a safe investment!

For more details

Mr. B. Padmanaban, CFP^CM

Certified Financial Planner, Chennai 

www.fortuneplanners.com

98843 49173

padmanaban@fortuneplanners.com

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