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Gold Price History 50 Years – Why you should invest in Gold?

Gold Silver

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January 12, 2021

Gold Price History 50 Years – Why you should invest in Gold?

Gold Price History – Gold a yellow shining material is considered a safe haven for investment. Gold is valuable & reliable metal for investment.

Gold consistently gives better returns to investors. In the year 2020, gold has given 25% returns to the investors. The 1 Lakh invested in gold in the year 2019 has become 1.25 Lakh in 2020. However, gold could not perform well in the year 2021. Gold generated very low returns in the 2021.

Gold is likely to give better returns in the year 2022.

In India buying a gold is tradition. Gold is purchased during festivals and during the wedding season. As per me, you should invest at least 2-20 gm gold every year. In this post we will talk about – Why you should invest in Gold? Gold Price history of 50 years and factors affecting gold price.

Also Read – Gold Loan Options in India – Key Features and Documents required

Why you should invest in gold?

The top reasons to invest in Gold are given below.

#1 Hedge Against Inflation

Gold acts as a hedge against volatile markets and inflation. The inflation rate is growing with time. Almost all currencies get depreciated in value with time. Gold is an appreciating asset. Over the long run, gold has beaten almost every asset class and given very good returns to the investors. The gold price has doubled over the last five years and tripled in a decade.

#2 Good returns over long term – Gold Price History – 50 Years

Historically gold has given very good returns to investors. In the year 2020 gold has given 25% return to the investors. In the last five years (2015-2020) gold has generated 14.5% returns to the investors.

If you have invested 1 lakh in gold on January 1, 2010, today (as on 1^st January,2021) your investment would have become 2.80 lakh (around tripled). The gold price history for the last 50 years is given below.

#3 Portfolio Diversification

One of the top reasons to invest in gold is portfolio diversification. Gold offers good portfolio diversification. Gold partially protect you from market events. You should design your portfolio in a manner that enables you to achieve your long-term financial goals. You should allocate at least 10% of your portfolio to gold or gold-related securities.

#4 Multiple forms of investment

Gold offers multiple forms of investment. You can invest in physical gold, gold jewelry, gold coins, gold bar, gold ETF as well as a sovereign gold bond issued by the government. You can select an investment form based on your need. As per my opinion, Gold ETF is the best way of investing in gold.

#5 Higher Liquidity

Gold offers a higher level of liquidity. Whatever form of investment you have be it a gold coin, gold jewelry or gold ETF you can sell gold anytime. The process of selling gold is quick and easy. There are multiple buyers of gold in the market. If it is a gold ETF it would take 3 business days for settlement and getting cash in your account.

#6 Gold is Tangible

Gold is a tangible asset. You can touch and feel gold. You can purchase physical gold after checking gold purity. Buying gold is relatively easy compared to other assets such as real estate, equity, and mutual funds. Electronic gold can be stored digitally and prone to hacking and other misuses.

#7 Gold does not require specialized knowledge

Gold does not require any specialized knowledge. You require specialized knowledge when you make an investment in equity, real estate, cryptocurrency, and mutual funds. On the other hand, you can invest in gold without any specialized knowledge. It is easy to check the purity of gold. You just need to check the hallmark symbol.

#8 Gold Loan

In bad times, you can also use gold to avail loan. Most of the banks and financial organization offers a loan against gold. You need to pledge gold to avail a gold loan.

Conclusion

Gold offers multiple benefits to investors. Historically gold has generated very good returns for investors. Investment in gold for the short term is not advisable but over the long run, one should defiantly consider gold for investment.

Happy investing 🙂

Standard Home Insurance – Bharat Griha Raksha

General Insurance

Shitanshu Kapadia

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January 7, 2021

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Standard Home Insurance – Bharat Griha Raksha

Bharat Griha Raksha – Bharat Griha Raksha is new initiative by IRDIA. After launching standard term insurance and health insurance policy, Insurance Regulatory and Development Authority of India (IRDAI) announced a standard home insurance policy. The guideline for the standard home insurance policy is issued by IRDIA on 4^th January, 2021.

The policy Bharat Griha Raksha is meant for home building and home content. The product of standard home insurance shall be issued by general insurance companies from 1^st April, 2021. The basic purpose of issuing standard home policy is to boost property coverage against natural calamities and damages from fire and other events. In addition to Bharat Griha Raksha two other policies are introduced for financial protection of MSME segment. The names of policies are Bharat Sookshma Udyam Suraksha & Bharat Laghu Udyam Suraksha.

Standard Home Insurance – Bharat Griha Raksha – Key Features

Policy Coverage

The standard home insurance policy provide coverage against following threats to the home covered. Fire, Natural Calamities such as earth quack, storm, cyclone, hurricane, tornado, flood, tsunami, landslide, rock slide, forest, Jungle and Bush fires, Impact Damage of any kind, Riot, Strike, Malicious Damages, Acts of terrorism, Bursting and overflowing of water tanks, apparatus and pipes, Leakage from automatic sprinkler installations and Theft.

Time Coverage

Time Coverage is 7 days from the occurrence of any of the aforesaid events.

Home Content Coverage

The insurance will provide home building coverage. Additionally, the policy will also provide automatic coverage to home content without any declaration. The home content coverage would be 20% of the sum assured up to maximum 10 Lakh. One can purchase higher insurance coverage by making declaration of home content.

Optional Policy Coverage

Bharat Griha Raksha Policy provide following optional coverage. The optional policy to be selected at the time of policy purchase.

Insurance for Valuable Contents like jewellery and stuffs.
Personal Accident of the insured and spouse due to an insured peril under the policy.

Waiver of Under Insurance

The policy provides complete waiver of Under insurance. If the sum of the insured general home content is less than that declared, the policy will still pay the entire amount. For example, you have insured home content up to 1 Lakh, but actual value of home content is 2 Lakh. Under such case whenever you file insurance claim, full amount 2 Lakh (up to sum assured) will be paid and not in proportion.

Add-ons

Insurers would be permitted to file innovative add-ons (additional covers) over and above the basic cover, in-built cover, optional cover, if any, and standard add-ons that these home insurance products already offer.

In addition to standard home insurance policy, two other insurance policies are introduced for small and micro enterprises. The primary aim of other two policies are to provide financial protection to MSME. Details of these policies are given below.

Bharat Sookshma Udyam Suraksha & Bharat Laghu Udyam Suraksha

This policy provides cover for the Building/Structures, Plant and Machinery, Stock and other assets of enterprises where the total value of risk across all insurable asset classes at one location exceeds Rs.5 Crore but does not exceed Rs. 50 Crore at the policy starting date.

The policy also provides several other in-built covers in addition to the basic coverage. Cover for alterations, additions or extensions, cover for specific contents, cover for start-up expenses (following a loss), Cover for payment of professional fees for Architects, Surveyors and Consulting Engineers, cost for removal of debris and Costs compelled by Municipal Regulations.

As per me, standard home insurance policy and MSME insurance is welcome move by IRDAI and surely increase penetration of home insurance and provide financial protection to MSME.

Best Investment Options 2025 | 6 Best Investment Ideas

Investment

Shitanshu Kapadia

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December 29, 2020

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Which are the best investment options for 2025? Stock Market, Mutual Funds, ELSS, Real Estate, Gold, Fixed Deposit, PPF, or NPS. Well, there are multiple investment options where investors can invest their money. But, most of the time it is seen that the Investor gets confused in selecting the best investment option that gives higher returns. To help investors, I will share the 6 Best Investment Ideas in this post.

Please note that the investment options given below are high-return investment options for high-risk investors. Please consult your Financial Planner or expert before making any investments.

Best Investment Options 2025 | 6 Best Investment Ideas

#1 Self Investment – Learning High Income Skills

Self Investment is One of the best investments ever. Self Investment beats all other investment classes. The learning you get by self-investment stays with you forever. It gives returns multiple times. This investment can not be taxed.

Every year you should invest at least 20% of your earnings in yourself. You should learn high-income skills. High-income skills will pay you money forever. So, the first best investment option in the year 2025 is self-investment.

#2 Equity Investment

Stock Market is the first choice when it comes to the best investment options for 2025. It is an investment option for high-risk investors. The stock market has generated magnificent returns for the investors in 2023 and is expected to give good returns in 2025 also. Few compelling reasons are given below.

Boost to economy

Positive news of vaccination and the expected vanishing of the COVID-19 pandemic will boost the economy. This will benefit hotels, airlines, restaurants, energy, real estate, and retail business. It will also reduce unemployment and result in increased spending and investment activity by domestic investors.

Boost in the Corporate earnings

Boost in the economy and favorable government policy will help in increasing corporate earnings. An increase in the earnings of corporate is good for the stock market. Strong corporate earnings will surely enhance investor confidence and lead to an increase in stock values.

Please note that the stock market requires a lot of knowledge. You need to analyze the stock before investing. You can expect 10-15% returns in the long to medium term from the stock market. You can check out VectorVest to learn more about investing.

#3 Mutual Funds

Mutual Funds investment is in second place when it comes to the best investment options of 2025. Mutual funds give lower returns compared to the stock market but it comes with diversification opportunities. In volatile market conditions, Mutual funds SIP helps investors from price movements. It is high-risk high rewards investment option. Reasons to invest in a mutual fund is given below.

Stock Market performance

Looking at trends and positive news it is but natural that the stock market is likely to give better returns to investors in 2025. As the stock market will give better returns investors can expect growth in the equity-based mutual funds.

You can expect 10-12% returns in good mutual funds. It is advisable to invest in mutual funds via SIP route.

#4 Gold

Gold yellow shining metal is considered safe heaven by many investors. Gold has generated consistently good returns for the investors. The investor should at least keep 2-5% of their investment in gold. Gold is high-risk high return investment option. The reason to invest in gold for the year 2025 are given below.

Historical returns

Historically gold has turned out to be a very good appreciating asset. In the year 2020, gold has generated 28% returns for the investors. In last 10 years (2011-2020) gold have generated 87% returns for the investor. Gold has generated negative returns only for twice in the last 10 years.

Other Reasons

Covid-19 is not over yet. In a few countries still lockdown condition exists. A new strain of COVID virus may create more issue. Under the pandemic situation, Gold is best and safe investment option. Gold is a comparatively safe investment option for the investor.

#5 Real Estate

Real Estate is also one of the best and profitable investment option for 2025. Stock market give appreciation and dividend. Similarly, real estate generates rental income as well as appreciation over the years.

Due to less liquidity in the market properties are available at lower price. Home loan rates are low and favorable for the investors.

#6 Venture Capital

Venture capital investment means investment in the startup. If you have lot of money you can explore investing money in startup in the year 2025. It is best investment option only for the rich investor who have surplus money. It is borrowing given to new business. The new business may perform or may not perform. This means venture capital investment should be done after doing due diligence and proper research.

Over to you

To recap the best investment options of 2025 are equity, mutual fund, gold, real estate and venture capital.

Make sure to select an investment option based on your financial goal and risk appetite. You should know the investment option thoroughly before investing money.

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Potential Multibagger Stocks – How to find?

Stock Market

Shitanshu Kapadia

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December 27, 2020

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Potential Multibagger Stocks – How to find?

Potential Multibagger Stocks – 2021 was a very good year for the stock market. Strong bull run could pull sensex by 60%.

Despite of high volatility due to COVID-19 pandemic, Sensex was able to recover faster due to several positive news such as economic recovery, stimulus announcement, and vaccine news. Perhaps this is the best performance of Sensex in history. Of course, this year was the year of Multibaggers. Many stocks turned out as multibagger stocks. Here is a list of Multibagger Stocks up to 2020 & Potential Multibagger stocks.

Multibagger Stocks

Multibagger stocks are stocks that give returns multiple times higher compared to their purchase cost. If the stock value (price) on which stock is purchased is doubled is called one bagger stocks.

The term multibagger was first coined by Peter Lynch in his book “One Up on Wall Street”.

Let’s try to understand this concept by practical example. The stock of MRF was trading at a value of Rs.38000 in December 2014. In December 2020, the stock of MRF is sold at Rs.76000. This means the stock of MRF has given 100% return (1 Bagger stock) in six years.

Mulibagger stocks are stocks of the company with high growth potential, scalable business model, sound management, strong market presence, and demand in the market.

10 Multibagger Stocks of 2010 to 2020

Here is a list of 10 Multibagger Stocks of 2010 to 2020

20 Multibagger Stocks of 2020

The list of 20 Multibagger stocks of 2020 is given below.

How to find Potential Multibagger Stocks?

I have analyzed multiple stocks and conclude that Multibagger stocks have usually had the following characteristics.

The strong and scalable business model with very good financials.
Strong Cashflow, low debt and short cycle of receivable.
High profitability due to unique or monopoly products
High earning growth rate
Strong market presence and market demand

To find out stocks with the above characteristic you need to do the analysis of stocks by making use of market capitalization and financial ratios.

Also Read – Multibagger Stocks of Rakesh Jhunjhunwala in 2020-21

Return on Equity – Return on equity is used for comparing company performance. ROE indicates the capability of the management to generate income from available equity. ROE from 15-20% is considered as good.

Free Cash Flow – Free Cash Flow means cash left after deducting operating expense and capital expenditure.

Debt to Equity Ratio – Debt to equity is company total liability by shareholder equity. This ratio is used to find out finance leverage of the company. Debt to equity ratio should be less than 1.

Interest Coverage – Interest coverage ratio means how many times company can cover its current interest payment with available earnings.

Sales Growth – Sales growth means growth in the sales by the company. This parameter is used to compare sales growth quarter to quarter.

Profit Growth – Profit growth means a combination of profit and growth. It is important to check the profitability and growth of the company while evaluating.

Now, in order to find out stocks that are fitting with above characteristics and financial ratio, I made use of the screener (Stock screener website).

This screener website provides the facility to screen stock by writing a customized query. I have made the following query to identify potential multibagger stocks. You can customize this query and get your result with a click of a button.

Market Capitalization > 200 AND Return on equity > 20 AND Free cash flow 5years > 0 AND Free cash flow 10years > 0 AND Debt to equity < 1 AND Interest Coverage Ratio > 3.5 AND Return over 1year > 0 AND Return over 5years >10 AND Promoter holding >35 AND Sales growth 10Years > 7.5 AND Sales growth 5Years > 7.5 AND Profit growth 10Years >15 AND Profit growth 5Years >17.5 AND Profit growth 3Years >10 AND Profit growth >0

Based on above query potential multibagger stocks of 2021-22 are given in the image below.

Potential Multibagger Stocks

Over to you

In this post, I have shared my method to identify potential multibagger stocks including stocks detail. You should not consider this financial advice for investment. Please do your own research to find out stock for investment. If required take help from the stock market expert.

Which method did you use for finding potential multibagger stocks?

Do you think the above stocks will generate good returns for the investors in the future?

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