A recent data study compared rolling returns and real returns of Nifty, gold, and PPF. Real returns mean returns after removing inflation. In the chart, the green line shows Nifty with dividends included.
The golden line shows gold. The red line shows PPF. This comparison helps us understand which asset has really grown wealth after adjusting for rising prices.
Nifty Returns After Inflation
When we look at the real returns, Nifty has given around 8.8% returns after inflation. This means equity has been able to beat inflation by a good margin over time. It shows that staying invested in the stock market can create solid wealth in the long run. However, returns may not be smooth every year. There can be ups and downs, but over time, the growth looks strong.
Gold Showing Strong Real Growth
Gold has delivered even higher real returns of around 14.1%. This is a big number. Many people compare gold’s current rally with past rallies. But it may not be fair to compare it with earlier periods. The world is going through a structural change, and gold is slowly becoming a more neutral global asset. Because of this shift, gold may behave differently than it did in the past.
PPF: Safe but Low Real Returns
PPF has given around 2.3% real returns. Yes, PPF offers safety and stable returns. It does beat inflation, but only by a small margin. Also, inflation is not the same for every person. In real life, each family faces different costs. So the actual benefit after inflation may feel even lower for some people.
Why Taking Some Risk Is Important
If you want better wealth creation, taking some risk becomes necessary. Only depending on safe options may not be enough. Investing in equity or other asset classes can help improve overall returns. At the same time, gold also deserves a place in the portfolio.
Keep a Balanced Asset Allocation
Instead of choosing only one asset, it is better to keep a proper mix of gold and equity. A balanced asset allocation can help manage risk and improve returns over a long period. When different assets work together, the portfolio becomes more stable and better prepared for different market conditions.
