Commodity Online
MUMBAI: For those investors worried about the falling indices in India’s equity markets, Quantum Gold Fund has this piece of advice: Invest in Gold.
According to the Fund managers, investing in gold is a form of insurance for equity portfolios and to minimize loses on account of investment in equity.
A historical analysis done by the Fund shows that stock markets have underperformed when compared to returns from gold. On many occasions stock markets declined or underperformed over the past 26 years. But, gold gave positive returns and outperformed equities by a wide margin in all these occasions.
Indian equity markets as on July 15, 2008 are down by 38% since the beginning of calendar year 2008. During the same period, gold in India is up by 29 %.
In 1982, BSE sensex gained 4% while gold gained 21%, in 1987 gold gained 22 % while sensex underperformed at -16%. In 2002, gold gained 24 percent as against Sensex gains of just 4%.
Investors are literally running away from India’s equity markets. Unabated selling by foreign institutional investors plunged the benchmark equity indices, BSE Sensex and Nifty to fifty month lows.
Equity investors have been told to even sit with their cash intact. A wave of pessimism has swept Dalal Street in the middle of July, with a steady flow of bad news and rumours weighing down the markets.
Amidst this pessimism Quantum Fund suggests investors invest a part of their portfolio in gold or Gold exchange traded funds and have peace of mind.
|
Year
|
BSE Sensex
(Gain / Loss) |
Gold INR
(Gain / Loss) |
|
1982
|
4%
|
21%
|
|
1986
|
-1%
|
29%
|
|
1987
|
-16%
|
22%
|
|
1995
|
-21%
|
13%
|
|
1998
|
-16%
|
8%
|
|
2000
|
-21%
|
1%
|
|
2001
|
-18%
|
6%
|
|
2002
|
4%
|
24%
|
|
2008*
|
-38%
|
29%
|
