Investment Strategy for Current Gold Market

Are you looking to Invest in gold right now when it's close to 1 lakh rupees for every 10 grams. Well, firstly, when you look at the data of the past 25 years, well, the Indian stock markets have given a return of 11% per annum, but gold has given 13% per annum. In fact, it's one of the best asset classes for the past three decades to have given the highest return, even beating the US stock markets.

But going forward, should you be investing into Gold at 1 lakh rupees rate? Well, there are three things that you need to follow for that.

Firstly, the price of gold rises whenever there is economic instability. So, if your investment horizon is for the next one year, I believe gold may continue to rise but take this in mind that when Gold enters a bearish phase it goes through the phase for a long time.

However, here comes the second point. Another ratio that one should look at is the ratio of Sensex to the gold price, which ideally, as a thumb rule, should be close to 1 is to 1. But right now, the Sensex is close to 80,000 and gold is close to 1 lakh, making the ratio 0.8, which means if you have a longer term horizon of the next 5 to 7 years, it may make better sense to invest in the stock markets as they may give higher return over this period of time.

But there is also the third point where if i had to balance out my portfolio for myself i would ideally put 30 percent of my net worth in real estate 50 percent in equities about 2 to 5 percent in fds and 15 percent of my net worth in gold.

So considering all that you may come up with a Portfolio with a balanced version of instruments for yourself.