However, despite a performing asset class, gold cannot be qualified as a non-volatile asset. Experts say it’s important to note that gold’s volatility is much higher than traditional fixed income instruments. Therefore, the investment horizon for gold should be at least three years, and ideally, it should be treated as a strategic allocation.
Let me discuss gold glitter in our own context. Kashmiris have always regarded gold as one of the most valuable commodities and mainly own it for hedging in times of crisis. Nothing threatened our love for gold. Uniquely, we mostly own gold in the form of wearable wealth like necklaces, bracelets or earrings and very less in the form of anti-damping bars or ingots. Such a treasure is the symbol of generations of patience, economy and, of course, risk aversion genes. Our great-great-grandparents, who bought gold instead of having a piece of land, knew that if they could get hold of gold, it would be of great benefit to their children.
Buying gold jewelry may not be considered an investment in the rest of the world, but in our culture it is one of the most valuable investments. He not only brought wealth to the people, but also saved them in times of crisis. For a Kashmir, gold jewelry is the best way to preserve and invest his wealth. Kashmiris have always believed that whenever they need money, they can sell their gold to generate money. This is how our parents and grandparents have always done it.
In short, gold is a store of value. We only use it when we really need the money. We use it as collateral for any medical or other emergency, a wedding or building a house. Even we sell the gold we own for the higher education of our children.
Notably, we generally wouldn’t sell gold just because the price is high. If gold hits a new high, we won’t be inclined to sell it either. Of course, we would be happy if the price increased. Precisely, I think we better view it not just as a potential money generator, but as a rabid inflation hedge.