Khota Paisa

How Good Is Gold As Investment?

Posted in General by khotapaisa on August 12, 2009

In an earlier post, I had analysed the performance of gold as in investment. The analysis was based on historical gold price in dollar terms. The analysis showed that gold has not been a consistant (low volatility) investment option as it is assumed to be.  When seen in rupee terms, gold has performed much better (atleast over last 10 years). I couldn’t get the necessary data for more than 10 years. But over the last 10 years, gold has given around 15% annual return. Does it mean that you should start investing more in gold? Well, I would say that irrespective of returns, you should typically have around 5-10% of your portfolio in gold. Any more exposure to gold will expose you to unnecessary volatility (as in all commodities).


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