Why Gold is an Important Asset
Gold has always been a significant asset for many people around the world. But how does it actually perform compared to equity markets? A global study using 25 years of data indicates that in most countries, gold has provided better returns than local stock markets. This may surprise many investors, but the data is accurate.
Gold vs. Equity Returns Across Countries
Let’s look at some examples. In Turkey, the equity market had a return of 21% in local currency, while gold returned 29%. That’s an 8% higher return for gold. In Brazil, equity returned 8.1%, whereas gold returned 14.7%. In Poland, equity gave a return of 4%, while gold gave 9%. Even in South Korea, gold outperformed equities. In most of these countries, the returns from equities were not able to surpass those from gold over the long term.
What About India?
In India, the scenario is a bit different. The equity markets returned 13.4%, while gold returned 12.2%. Here, Indian equity markets performed slightly better than gold, but the difference is minimal. This indicates that gold still retains significant value as an asset. While it may not always outperform equity, it complements it well. Gold is not a competitor to equities; rather, it serves as a good partner that helps balance your portfolio.
Gold as a Diversification Tool
Many individuals underestimate the importance of gold. Some estimates suggest that globally, households and family offices hold less than 1% of their wealth in gold, which may not be wise. Gold acts as an excellent tool for diversification, especially in emerging markets. It protects your wealth against weak currencies and political instability. Priced globally, gold offers stability even when local markets are under stress.
Why You Should Consider Gold
Studies have shown that gold helps mitigate the volatility of equity markets. When equities are underperforming, gold often does well. It brings balance and safety, particularly in challenging times. This isn’t just an opinion; it is backed by real data.
What are your thoughts on gold as a long-term asset? Do you hold any gold in your portfolio? Or is it any other commodity? Share your thoughts in the comments below! If you found this post helpful, please SHARE IT WITH YOUR FRIENDS. Thank you for reading!
WeekendInvesting launches – The Momentum Podcast
In this episode of the Momentum Podcast by Weekend Investing, Alok Jain sits down with Mr. Thomas, a passionate retail investor, to uncover his remarkable journey—from exiting the markets at the worst possible moment during the 2020 crash to finding clarity and consistency through momentum investing.
Topics Covered:
✅How a train journey sparked his interest in the stock market
✅Emotional investing mistakes & lessons from the COVID crash
✅Why he shifted from value to momentum-based strategies
✅The Weekend Investing system that gave him peace of mind
✅How he balances aggressive bets with long-term wealth-building
Whether you’re just starting out or navigating your own investing style, this episode is packed with relatable stories and actionable insights.
