You are right. Gold has given very high returns in the last one year. The gold mutual fund category has given around 30% returns in the last one year. Two months ago, some funds were giving round 50% returns. So, you are right about the yellow metal shining bright ever since Covid-19 has started spreading across the globe, raving global economy and causing disruptions along its path. The precious metal, always considered a hedge in times of uncertainty, gains a lot as investors to sought safety.
However, it has been losing its steam ever since good news from pharma companies regarding vaccines started rolling in. Now that the roll out of vaccine looks certain, there are many bullion experts who believe that the yellow metal is unlikely to shine bright in the coming months. They point out that gold was stuck in a narrow range for a very long time after the global meltdown in 2008.
Don't stop reading yet. However, many investment managers believe that it is premature to write off gold in a hurry. They point out that many uncertainties regarding global growth may persist even after the roll out of vaccines. Even the efficacy of the vaccine may be questioned. So, gold may continue to do well for some more time.
So, where does that leave you, an average mutual fund investor? One, you should never invest in gold to pocket very high returns. Always remember that diversification or reducing the overall risk on the portfolio should be the reason why you should invest in gold. Gold may offer you higher returns during such uncertain periods, but it will offer only modest returns over a long period.
If you are still planning to invest in gold, you may choose a consistent gold fund and start an SIP. Keep it as a part of your overall investment plan. It should never be more than 5-10% of your total portfolio. Take your eyes off the returns and focus more on the stability it offers to your portfolio.
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4 Comments on this Story
Swaroop kumar Dey8 days ago
ullu kee pathayy.... gadha koo hattayyyaaa... gold bar pahalay bank koo lagaaaa.... bad mayy dhake teraaa gold kaun admii pucha gaaa.... goberment admii koo hayy damm..... police balll too ak khunedar admii thaaa... kandkattaa too solder bolraa hayyy..... hay damm gold bath kharid naaa kayyy.... tera indiaa indiaaa mayyy hayyy tooo....... war vs ð ®ð ³ and ð ¬ð §
Ramana Murthy10 days ago
Good adviceand timely too
Pratik Ghose10 days ago
The write up technichally seems ok.