Indians Prefer Gold, Mutual Funds For Investments

Indians love gold. But interestingly, mutual funds too are fast gaining popularity as an investment option. According to a report by ASSOCHAM, while gold continues to be a safe bet, Indians are also returning to the stock market for higher returns following a buoyancy in the equity market in the recent times.

“The middle class families are investing in gold as the reliable and stable bet while some of them are also returning to the riskier option of the stock market, enthused by a runaway rise in the equity market in the last one year, especially after formation of the new government at the centre,” said DS Rawat, general secretary of the industry body.

The report revealed that considerable percentage of working women preferred investing in the stock market as well through mutual funds schemes like Systematic Investment Plans (SIP) for quicker returns.

According to the study, about 72% of the respondents preferred gold as an investing option followed by shares and mutual fund schemes in this festive season followed by extra earnings from bonuses. On the other hand, 62% of corporate seconded the equity markets for investment because there is an easy availability of advisory consultants who they can rely on for guidance.

"They are now focusing on investing in gold and stock markets rather than in traditional channels of investment like post offices, fixed deposit and PPF promoted by the government," added Rawat.

Nevertheless, Indian investors still practiced investing a portion of their funds in the traditional options as these assured safe returns.

Interestingly, analysts noted that while investment in gold may seem as a good option, it may lead to a riskier situation in the overall economy in the long run. “Gold imports rose by 450% in September which is actually worrying as this would add substantially to our import bills. Rising imports have caused concerns among the policy makers while the government is mulling import curbs again,” noted Rawat.