What is the best way to invest in gold monthly?

These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.

I just started my first job. My salary is modest, but I would like to invest a small amount in gold every month as a long-term investment. What are the safest and most secure ways to invest in gold through monthly investments? Which option is suitable for someone starting out with a limited budget?

Sumit Duseja, Co-Founder & CEO, Truemind Capital (Sebi-registered Investment adviser): If you’re starting with a limited monthly budget, the key is to choose a gold investment that is safe, low-cost, and easy to accumulate over time. Since you’ll eventually want to redeem your investment, liquidity is an important factor to consider. Keeping this in mind, starting a monthly SIP in gold mutual funds is best for beginners. Gold mutual funds invest in gold ETFs, offering exposure to gold prices without requiring a demat account. Gold mutual funds are professionally managed with no storage or purity concerns and are easy to redeem. If you already have a demat account and are comfortable placing trades, gold ETFs are another efficient option. They generally have lower costs, although you’ll need to set up your monthly investments through your broker.

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I am 39, a homemaker, with Rs 15 lakh to invest and a 10-year horizon, with no immediate liquidity needs. Could you suggest an allocation across large-, mid-, small-, flexi-caps, and quant funds, along with gold/silver ETFs? Should I also allocate a portion to international funds? Should I invest the amount as a lump sum or through SIPs/STPs? What’s the ideal monthly deployment?

Dilshad Billimoria MD & Chief Financial Planner, Dilzer Consultants: It’s good to know that you are already well aware of different asset classes. This awareness is the first step towards financial independence. While the ideal asset allocation should be based on your risk profile, investment horizon, financial goals and liquidity needs, considering the current market conditions and your 10-year investment horizon, I would suggest allocating 25% to large-cap funds, 20% to flexi-cap funds, 15% each to large & mid-cap funds, 6% to small cap funds, around 5% to quant funds, 7% to gold, silver or multi-asset funds, and 7% to international funds. Rather than investing the entire `15 lakh at one go, it may be prudent to stagger the investments over 15-20 weeks through regular weekly deployments to reduce the impact of market volatility.

Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com