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The role of gold in your portfolio

Last updated on: October 12, 2009 12:58 IST

Research has shown that Gold adds stability to a diversified investment portfolio. Experts recommend that your portfolio must include up to 10 per cent allocation to gold.

In the Indian context, many families have a lot of their wealth in the form of gold jewellery, and so one could make the observation that we Indians are over allocated to gold. This is not something you should worry about if this applies to you. However, we would suggest that going forward, you might want to consider investing in a family home and in other long-term investment assets such as stocks and bonds that generate income that can be used towards funding financial goals such as children's education or parents' retirement. This can allow you to diversify into a more balanced portfolio.

How to buy gold

Gold prices can be volatile during certain cycles, so if you are gambling on prices going up, be sure you can protect your downside. If you are buying to invest for a wedding or similar event, then you are best off if you buy it periodically, as your funds permit.

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