Knowledge Base

Indians have always been investing in gold for a long time, but now the trend is changing, and it is witnessing a gradual shift to investing in financial assets, today lets compare StockBasket vs Gold to know which asset class can help you to create real wealth in the long term.

When comparing gold with the stock market, we need to consider many aspects. In both cases, investors invest heavily when the prices are low and hold them till the prices rise to their expected value.  There is always an Inverse relation between gold and stocks. It is observed that when the prices of gold go up, the stock markets fall and when the prices of stocks go up the prices of gold falls. The reason behind this can be that when the stock market is in loss gold is considered to be the Safe Haven in investing. 

Gold

Let’s discuss some of the advantages and disadvantages of investing in Gold:

Advantages:

1. Liquidity: Gold has high liquidity as compared to other investment options, it can be easily  converted into cash
2. Gold as a commodity: Gold is considered as the most favourite Commodity to buy for men and women in India it represents the wealth of an individual in India
3. Gold as a hedge fund: Gold as historical performed well during inflation when people fear to invest in stocks and debt funds.
4. Stable Investment option: Gold is not involved in any inflations and is a safe and stable investment. Hence, during inflations, gold offers a much more stable investment than other investments.

Disadvantages:

1. Not a Passive investment: Gold cannot be considered as a passage in management as it does not gives you a regular income in the form of interest or dividends like Stocks and bonds.
2. The Issue of price correction:  At the time of heavy fall the market people open rush to buy gold as a safe investment but as markets become stable and the gold price corrects itself, might lead to a big loss for the investor
3. Storage problem: Buying gold storing and then storing it can be a big issue, also if you are planning to keep into locker you need to pay and extra yearly charge for it

StockBasket

StockBasket is India’s first buy and hold long-term investing platform, it operates under the Samco brand. It has a pool of expert-curated ready-made basket of stocks designed as per the investor’s financial goals like International Vacation, Retirement plans, or saving for one’s child education. Investors have to hold the basket for at least 5 years for wealth creation.

Let’s have a look at some of the Advantages and Disadvantages of StockBasket :

Advantages:

1. High Returns on Investment: The average return on investment on StockBasket are very high. The CAGR of average StockBasket lies between 15-17% which has the potential to double your investments in just 5 Years
2. High Inflation Beating Capacity:  As the Compounded annual growth return is very high it can easily beat the inflation and give you some staggering return on investment.
3. Dividends: With StockBasket you get the benefit of dividends which are directly credited to your bank account.

Disadvantages:

1. Dependent on Market forces: Like other investments in Stocks, StockBasket is also dependent on the market forces, but due to the selection of top companies in the basket, they usually have less impact of the market corrections on them.
2. Penalty on Early Exit: StockBasket charges twice the exit fee if the investors sell his StockBasket before 5 years, this policy is purposely made to bring discipline in investors to stay invested for at least 5 years for long-term wealth creation

 Summary

StockBasket vs Gold: Although Gold is one of the safest investment for the investor it does not have the power to beat the inflation thereby giving low returns to the investor, wherein StockBaskets give optimum returns to the investors thereby helping them to start their wealth creation journey.  

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