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Strategy Guide

SGB SIP Strategy

Build your gold portfolio systematically through regular investments

**What is SGB SIP Strategy?**

A Systematic Investment Plan (SIP) approach for SGBs involves investing a fixed amount regularly in SGBs through the secondary market, rather than making a single lump-sum investment.

**Why SIP works for SGBs:** Since RBI discontinued new SGB issues (Feb 2024), you can implement SIP by buying different SGB series from the secondary market each month. This provides: - Rupee cost averaging across different gold prices - Disciplined investment habit - Diversified maturity dates

**Note:** Unlike mutual fund SIPs, SGB SIP requires manual execution on stock exchanges.

Benefits

  • Rupee cost averaging reduces timing risk
  • Builds discipline in gold investing
  • Spreads purchases across multiple SGB series
  • Diversifies maturity dates for staggered liquidity
  • Easier on monthly budget than lump sum

Risks & Considerations

  • Transaction costs add up with frequent purchases
  • Requires active monitoring and execution
  • Liquidity varies across SGB series
  • No automated SIP facility like mutual funds
  • Market timing still affects individual purchases

Step-by-Step Implementation

1

Determine monthly investment amount

Decide how much you want to invest in SGBs each month based on your budget and goals.

Tips:

  • Start with 5-10% of monthly savings
  • Minimum practical amount: ₹5,000-10,000 per month
  • Account for brokerage and DP charges
2

Set up tracking system

Use our SGB Analyzer to identify best-value SGBs each month before purchasing.

Tips:

  • Check discount to fair value
  • Compare yields across available series
  • Note liquidity (trading volume)
3

Choose SGB series monthly

Each month, select an SGB series offering good discount/yield combination.

Tips:

  • Prefer series with higher trading volume
  • Diversify across maturity dates
  • Consider tax implications of maturity timing
4

Execute purchase

Buy the selected SGB through your broker's trading platform.

Tips:

  • Use limit orders for better prices
  • Buy during market hours for better liquidity
  • Keep records for tax purposes
5

Review and rebalance

Periodically review your SGB portfolio and adjust strategy if needed.

Tips:

  • Track overall portfolio discount/yield
  • Monitor maturity schedule
  • Adjust allocation based on goals

Best For

  • Salaried individuals with regular income
  • Long-term gold investors
  • Those who want discipline in investing
  • Risk-averse investors preferring averaging

Not Suitable For

  • Those seeking quick liquidity
  • Investors uncomfortable with manual execution
  • Very small investment amounts (high % in costs)
  • NRIs (cannot invest in SGBs)
**Disclaimer:** This strategy guide is for educational and informational purposes only. It does NOT constitute investment advice, financial advice, or a recommendation to buy or sell any securities. Investment strategies involve risks and may not be suitable for all investors. Past performance does not guarantee future results. Gold prices can be volatile and SGBs have lock-in periods. Please consult a SEBI-registered investment advisor before implementing any investment strategy. Consider your risk tolerance, investment horizon, and financial goals.

Related Strategies

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Calculate Your SGB Returns

Use our calculator to estimate your potential returns based on investment amount and holding period.

Frequently Asked Questions

No, unlike mutual funds, there's no automatic SIP facility for SGBs. You need to manually buy from the secondary market each month.
Technically, you can buy 1 unit (~₹6,000-7,000). However, considering brokerage and DP charges, ₹10,000+ monthly makes the SIP more cost-effective.
Not necessarily. Diversifying across series gives you staggered maturity dates and spreads risk. Choose the best-value SGB each month.

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