At a time when the world economy is slowing down and central banks are devaluing their currencies, gold has been one of the best investments. In a time span of just two years, gold prices have doubled in rupee terms thanks to the US Fed's QE (quantitative easing) programs and the massive rupee devaluation over the last one year. The performance of Indian stocks, on the other hand, has been dismal.
However, ever since the so-called 'reforms' have been announced, Indian share markets have witnessed a change of sentiment. While the BSE-Sensex has crossed its 14-month high, gold prices have dipped by about 4%. Many so-called 'experts' have already started giving big targets for the Sensex. Some are of the view that investors are now dumping gold to buy equities.
In our view, one should refrain from buying into such arbitrary arguments. And there is no reason why investors should sell gold to buy equities. Instead, we believe an optimal investment portfolio should have a mix of both in the right proportion.
However, ever since the so-called 'reforms' have been announced, Indian share markets have witnessed a change of sentiment. While the BSE-Sensex has crossed its 14-month high, gold prices have dipped by about 4%. Many so-called 'experts' have already started giving big targets for the Sensex. Some are of the view that investors are now dumping gold to buy equities.
In our view, one should refrain from buying into such arbitrary arguments. And there is no reason why investors should sell gold to buy equities. Instead, we believe an optimal investment portfolio should have a mix of both in the right proportion.
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