Should I buy SBGs?

[mrdp]

So SGBs have been announced at the rate of Rs 6213/g.
Is this the right time to buy? And if yes, what do you suggest? How much should i buy?
For context, I have started investing in MFs this month onwards. I will be investing 15k in 4 funds and have also started 2 RDs worth 25k per month.

I am a 24F with take home 1.3 lpm.

 

[mythriilesque]

@mrdp You have a mild case of dyslexia just like me, cheers

 

[mrdp]

@mythriilesque Sorry?

 

[mythriilesque]

@mrdp Read your post’s title

 

[mrdp]

@mythriilesque Oh okay
I tend to mess up while writing. I guess you are right

 

[mythriilesque]

@mrdp Yup, I do that all the time too with acronyms, glad to see this happen in the wild

 

[mrdp]

@mythriilesque Hahaha!
This deserves a high 5!

 

[mythriilesque]

@mrdp 🫸🫷

 

[foreversaved1949]

@mrdp ++same question. Is it good time to buy SGB’s or wait for the 24-25series

 

[niko]

@mrdp Sgb which hv matured gave over 13% interest per annum. U will fall in higher tax brackets and with reduced interest rate of 2.5% and historical returns of gold, u can assume 12.5% return pa. It is safer than any other instrument but has 8 yr time period.Selling before this leads to loss of capital gains exemption. U hv MFs and they also give better returns when they compound over a period of time. 5 years atleast, more is better. Ur RDs are possibly short period ones and can provide requisite cash if required.

If I had 60k and had to put it in MF,sgb and Rd and had some provision for emergency fund then would hv put 30k in MF and rest equally in sgb and Rd(fd actually or better yet hv an account where any amount above 1 lakh automatically gets sweeped into fd and I can use part of it anytime without any penalty). More in MF mainly bcoz I trust Indian stock markets in coming years and can be redeemed if some emergency comes up.

Will myself be moving some fd proceeds into sgb in this tranche. Gold will go up this yr. Delaying will make it costlier.

 

[noroadsleft]

@mrdp SGB has given me 32% returns so far

 

[mrdp]

@noroadsleft What is the timeline of your investment?

 

[noroadsleft]

@mrdp I invested by a stroke of luck when I was new to the market. Papa wanted to play it safe so he told me to check out SGB after he read about it in the newspaper. This was around COVID times when Gold had taken a hit. The price back then was 46820 per 10 gms and he sent me money to buy it. I think SGB is a safe investment. I get 2.5% returns directly credited to my bank account annually. So yeah, if you want to play it safe, buy it now instead of investing in physical gold but that also depends on your needs. My timeline has to be around 2 years, since 2021.

 

[enriquegill012]

@mrdp Why don't u try buying SGB from the market directly? Also the MF overlap is too much, mind if I DM to check all the funds? Also needed some insight into what returns u might be getting so far

 

[mrdp]

@enriquegill012 Sure

 

[mckayla17]

@enriquegill012 How's buying from market better?

 

[enriquegill012]

@mckayla17 Market as in open market not shop or physical

 

[scott_s]

@mrdp SGB started out in 2015. The first tranche matured in 2023. The annualised return was around 11% barring the 2.5% annual interest. I'd say they are a safe bet as their underlaying asset i.e. Gold will appreciate. If you hold till maturity (8 years), you'll not have to pay capital gains tax as well. So it's a pretty good investment. I'd suggest you to buy atleast 15 gm to make it worth your investment. If you like, you can invest in future tranches as well. For dipping your toes in this, anything north of 15 gm is fine.