Gold is the 'Winner'

📌 Let's see the last 1 year returns of different asset classes.

1) Gold - 14%
2) Nifty 50 Index - (-3.15%)
3) Bond - Around 9 to 11%
4) Fixed deposit - 7 to 8%

It's clear that "Gold" is the absolute winner.

But does Gold will give the same kind of return every year?
The answer is "No"

Why?

📌 Well, Gold is acting as a hedging instrument.
People are buying the gold because it is safer and low risky or other asset classes are either too volatile or it's not giving better return than gold.

📌 But once all the issues are over, the economy is growing well i.e other asset classes ( like the stock market) are performing well, then a large sum of money will flow into that asset classes. At that time gold will fall.

📌 Example - COVID crash in 2020  Stock Market stumbled, on the other hand Gold price sky rocketed. But in 2021, the stock market went higher and the gold price dropped.

📌 The same thing is happening now, due to war, inflation and other turmoil incidents, people transferring their money to the safer investments, So they are buying the Gold heavily, the demand raises, the price raised.

Whether we need to buy the gold or not?

📌 We can't say that another COVID-like situation will not come in future. So , We always need to buy the Gold as a hedging against other risky and volatile investments.

📌 The proportion of gold in your portfolio is based on your risk appetite. Always diversify your investments into different asset classes.

I am buying Gold through Gold Bees.
#gold #investement #hedging #diversifyyourportfolio