We all have some allocation to gold without making any conscious effort. If you are wondering whether gold has a place in your portfolio, then it is best seen as a hedge against uncertainty. A small proportion of the portfolio, invested in Gold can provide some degree of mental peace in times of extraordinary risk.

But here is what you can do to ensure you are suitably allocated to this much-loved metal. 

The gold jewellery you own is a bit like the house you live in when it comes to being part of your investment portfolio. Given that you are unlikely to sell either, it’s unwise to include the value of this jewellery in your investment portfolio. 

If you feel otherwise, that you can easily sell the jewellery when the need arises, even then attributing a monetary value can be difficult. You can’t take the price you paid for it as the resale value. While buying it you would have paid a markup for making and design charges. 

This is not a part of what the gold is worth. Secondly, in certain types of jewellery, thanks to embedded precious stones, some of the yellow metal gets scraped off and that too means that the price on resale will be lower than what you paid to acquire the jewellery. 

Rarely does jewellery get used towards achieving financial objectives, its only in times of extreme distress does it get sold. 

Investing in gold

Hence, you need to have a separate gold investment to keep that as part of your investment portfolio. Here as well, rather than buying physical gold which you need to store in a locker, it’s better to invest in gold price linked securities like Gold funds (ETFs). 

This is a paper investment with a similar return as if you had bought physical gold and held till you desired. You can buy and sell them at any time and you can even invest regularly on a monthly basis in small amounts, which you may not be able to do with physical gold. 

Rarely does jewellery get used towards achieving financial objectives, its only in times of extreme distress does it get sold. 

Keep this separate from your jewellery, which should not be included in your financial investment portfolio at all. 

If you have already accumulated a lot of jewellery as a cushion for uncertain times, then you need to assess the resale value of this jewellery and then add gold investment if you need to. Don’t assume the value to be what you paid to buy it. 

Over the years as the value of your portfolio grows, add incremental gold assets through the investment route as it is cost-effective, easy to maintain and sell when needed. 


Take stock of the re-sale value of the gold you hold; in case you need to liquidate your gold holdings in times to come, it’s better to be aware and prepared, rather than assume a value that is higher than worth. Lastly, having too much gold will not help you grow wealth, try to keep the overall gold investment allocation to not more than 10% of your portfolio value.