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Tata Capital > Blog > Reasons Why Millennials Prefer Investing in Gold

Reasons Why Millennials Prefer Investing in Gold

Reasons Why Millennials Prefer Investing in Gold

It is no denying that when it comes to growing their wealth, millennials aim to be more proactive in their approach than their previous generations. They don’t hesitate from taking investment risks and doing things a little differently.

However, the recovery phase post-pandemic has had them prioritizing secure and lucrative investment options. More millennials have come to realise the importance of hedging against economic certainties – as they are now re-inventing gold as an essential aspect of their financial planning. For them, gold is no longer a measure of wealth, but a means of stability, liquidity, and higher returns.

Here’s why millennials prefer gold as a secure investment option.

1. Ease of investment

While most funds offer you a higher interest rate, they also require you to lock your funds for longer periods. However, this inability to access funds is not practical for millennials who are entrepreneurs and business owners. Then, gold is easy to buy and sell in the market, in case emergency strikes.

Moreover, India is the world’s largest market for gold, where the post-pandemic period saw a 37% rise in demand for gold. No doubt, it is a highly lucrative investment option due to its ease of investment and diverse investing opportunities.

2. Safe

The cryptocurrency boom has had the young generation make some fortune, but the market’s volatility hit them a great deal too. Compared to these newer investment options, gold has been a top choice owing to the safety factor.

Gold also appeals to millennials as an excellent form of long-term investment. Investment in gold jewellery has always been an imperative aspect of Indian culture. And with the tradition of passing them on to future generations, this gold tends to remain in the family for a long-time, making it a long-term asset.

Additional Read: Gold ETFs: Features & Benefits, Investment Process & Tax Efficiency

3. Facilitates portfolio diversification

When it comes to building an investment portfolio, of course, it’s never a good idea to put all your eggs in one basket. An ideal portfolio should have funds invested in different asset classes and even several instruments within that asset class. So, practical investors will always divide their risk over a number of different assets – gold being one of them.

Considering that gold is a separate class of investment, it will help in diversifying your existing investment portfolio. You can see it as insurance – over time, gold will hold its value, so it is an asset that will protect your portfolio even in unprecedented times. 

4. Multiple investment choices

No doubt, millennials tend to do things differently than their earlier generations. So, they have moved on from physical gold to more innovative and non-conventional instruments. With time, gold has taken on new forms, yet it remains an invaluable investment option.

Today, paperless gold has become the new favorite which includes Sovereign Gold Bonds (SGBs) and Gold ETFs, along with other options like gold coins, Gold Mutual Funds, Gold Companies, Digital Gold, and more.

5. Hedge against uncertainty

Historically, during times of uncertainty, gold prices have been known to be the most stable. While most assets don’t perform well during periods of inflation, gold is a commodity whose value increases with inflation, hence, standing as an exceptional hedge against it. Investing your hard-earned money in gold saves you from market fluctuations and risky assets. 

With unpredictable times, gold has thus, gained more popularity among millennials due to its easy liquidity, stability, and long-term viability.

Additional Read: Physical Gold Vs Digital Gold – Which is Better?

Final thoughts

With multiple asset options, excellent returns, and a promising future, gold continues to attract investment from millennials. Look into the various new forms of gold instruments and build a diversified and secure investment portfolio.

And to make your investments quick and hassle-free, download the Moneyfy app from Tata Capital! With this easy-to-use portal, invest in mutual funds, SIPs, insurance, and more. Visit our website to learn more!

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