Gold has always been favoured by almost everyone in India if not from an investment perspective that would draw gains but from emotional concerns as well. But nonetheless it is also a highly safe investment haven in times of different geo-political and economic crisis. And when the economy is seen to be underperforming for various reasons, people most likely prefer to take the yellow-metal route.
Return from the asset class of just 5% in the past year but still some holding makes sense
In India gold has seen prices rise to near three-month high yesterday surging to over Rs. 30000 in price for 10 gm, but despite the rising spree in prices of gold mainly on account of upcoming wedding season demand and strong global sentiments, experts have called it a dead investment.
And in the year 2017 a muted return of just over 5% was registered while at the global level gold outperformed the returns of 2011 producing gains of 13% as per the leading business daily report.
Most chunk of investors money into equity MFs should now on be chosen wisely as stock market is highly likely to correct
The current euphoria in the market is sustained due to good earning optimism plus the pre-budgetary stance seems to be in the interest of wider public as this is the final full-fledged budget by NDA led Narendra Modi government. Nifty scaled past levels of 10700 for the first time in the beginning of the week on Monday.
But any negative outcome, can be a big deterrent for the Indian stock market . For instance, Federal Bank came up with Q3 2018 results on Monday and reported a higher net profit figure but disappointed on the NPA front. This could be factored by the markets and bring about correction.
Paper gold can be held in comparison to earn better returns
Though the government has done all its bit to move people from physical gold to paper gold with the introduction of Sovereign Gold bond. The subscription to it is still not encouraging and given the current taxation and returns from gold, investors can definitely look upon this better investment avenue.
Experts suggest atleast 10% gold in your portfolio kitty
If experts are to go by, they are of the opinion that rupee which strengthened against the dollar last year caused a wide differential in returns of gold at a global and in Indian context. Nonetheless, expects better returns going forward in the next half of the calendar year as liquidity is likely to come down but may not perform well in the first half due to taxation reforms in the US.