BQ Big Decisions: Don’t Get Caught Up In The Gold Rush
How high can gold prices fly? And should you forget about asset allocation theory and hop on for the ride?
BloombergQuint’s Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
Sometimes all it takes is a fantastic rally in the price of a particular asset class for investors to throw all their tried-and-tested, well-thought-out policies out of the window.
Financial advisors often caution against having too much gold in your portfolio. Usually, the ceiling to watch for is 10% of your overall portfolio. This does not include gold jewellery, because this is usually considered to have been bought for consumption rather than as an investment.
A few factors are making investors have second thoughts about maintaining this limit for gold holdings. First, uncertainty is rampant. With the Covid-19 pandemic showing no signs of going away, investors in equity—having enjoyed a brief spell of success—are now wondering whether they’re standing on shaky ground. And second, central banks, including the Reserve Bank of India, have slashed policy rates to record lows in a bid to support flagging economic growth.
This has made gold more attractive in its oldest and most popular avatar – a storehouse of wealth. Gold prices globally have risen by over 25 percent since the start of 2020.
On this BQ Big Decisions podcast, BloombergQuint speaks to Sunilkumar Katke, head commodities and currencies at Axis Securities about the factors that have led gold to the perfect launching pad, and to Harshvardhan Roongta, certified financial planner and co-founder of Roongta Securities about what the average investor should bear in mind before joining the rush for gold.