MF Vs Gold: What Is Best For You?

Traditionally, investors have embraced gold as a safe haven for portfolio protection during political tensions, geopolitical turmoil and economic turbulence. Gold prices, historically, tend to surge significantly only during periods of negative real interest rates when gold reclaims its traditional role as store of wealth that would at least keep pace with inflation to preserve the purchasing power of the investment. Bonds have a committed return, in the form of coupon / interest, which would result in real positive returns most of the times, or sometimes a loss, depending on movement of interest rates. Gold has served as a strategic asset which acts as an effective portfolio diversifier and aids in improving risk adjusted returns while adding liquidity during periods of crisis without side effects of impact cost or difficulties in timing the market (Chart-1). As per analysis of world...