Gold price, Fixed Deposits, Debt Mutual Fund, and Real Estate: Details highlighted by Ashika Group

In the International Market, Gold is already down from its last peak of almost $ 2000 to $ 1700 today, says Amit Jain is the Chief Strategist - Global Asset Class, Ashika Group. It is a correction of almost 17% from its peak of Aug 2020. Even in Indian market it is down from almost Rs 55000 to Rs 44000, which is a downfall of almost 20%. Ashika Group views this is a good entry point in this asset class from long term Investors. This downfall primarily happened due to the ease of Global War tension between US & China, which was the biggest risk post Covid-19 outbreak across World Economies.

Gold as an asset class has a tendency to outperform all asset classes whenever there is a “ perceived risk “  in the Global Economy, hence Ashika Group had this correction in the bull market of Gold. However Amit thinks it is a blessing for long term Investors who generally park their money in debt instruments like fixed deposits & debt MF.  At this entry point if investors choose Gold compared to Debt MF or FD’s then there are much higher chances that they will generate better risk adjusted returns over the medium term. 

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In Fiscal 2020-21  Japan, US & Europe alone has printed more than $ 9 trillion , which is almost three times to India’s GDP. This money ultimately will move to the bottom of the pyramid & create demand for all commodities & asset classes in the World. Ashika Group has already seen a bubble equivalent valuation in Global Equity Markets & also in the last four months we have seen a surge in Global Real Estate prices as well. Ashika Group had already pre-emptied this asset bubble across all asset classes & commodities in our last media view in June 2020 & now it is becoming reality. At this point of time, it is advisable to rebalance your existing portfolio & increased weightage of Gold in your overall portfolio.

Globally, in this ongoing decade of 2020-2030, Fixed Deposits & Debt MF will underperform Gold post tax & fund management charges. Hence it is advisable to pre-empt this asset class cycle in the beginning of 2021, rather than doing post mortem by end of 2030 & regret on opportunity lost.