Gold price: How much to invest, profit expected and more - The shining story

Gold price has been rising to all highs in recent past and then has stabilised in recent weeks. Undoubtedly, gold has been one of the most preferred assets this year, while outperforming all other asset classes as it witnessed a spectacular move to an all-time high of Rs 56191 per 10gms, soaring by almost 43 percent and is about to settle with splendid returns of nearly 29 percent on the domestic bourses. Not just this year, gold has been a store of value for centuries due to its distinct characteristics. Religare Broking Highlights that Gold is considered a safe, steady and liquid investment while having a strong track record of building wealth and enjoys the status of a safe haven asset in adverse economic situations. Interestingly, precious metal continues to be more precious due to depreciation of the rupee against the dollar and the trend looks to sustain till there is an interest rate differential between India and the US.

How much to invest in gold investment? 

Religare Broking says that while it is interesting to note that gold is now being considered not just for consumption purposes, but also as a strategic asset in any portfolio. It is advisable to invest 10%-15% of one’s portfolio in gold through any of the available mediums as it bears a low to negative correlation with other major asset classes. Rather than timing the market, gold should always be a part of one’s portfolio as it has been a reliable investment for ages, that has not only stood the test of time during financial hardships as a safe haven, but also has a proven record of decent returns with a low risk factor.

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How much profit or returns from gold investment?

Gold has a track record of generating steady returns over various time periods. If one looks at the historical data, gold has delivered 13.37 percent annualised CAGR return over the last 15 years, 9.22 percent for the last 10 years, 14.96 percent for the last 5 years and 19.75 percent for the last 3 years. Considering the fact that gold is an evergreen asset, anytime is a good time to buy Gold !!

Rolling Returns from gold:

Annualised Rolling returns are the best measure of an asset's performance which measures the asset's absolute and relative performance over some time at regular intervals, without any bias. The average returns turned out to be superior to inflation figures which make gold a steady investment as well as a perfect hedge to preserve the purchasing power of a currency.

Portfolio Diversification:

When it comes to investing, gold has always been a great diversifier. As an integral part of a portfolio, it drags down volatility and improves the overall performance of a portfolio. Referring to the illustration of different asset classes, gold has a formidable track record over a period of time. While being a less risky investment avenue, gold has kept up with the US equity market since 1971, and outperformed it since 1999. As a safe haven, gold has outperformed US treasury (government bonds) since 1971, 1999, and 2009.