Festive season brings with it more joy & happiness – people get together for celebrations, exchange sweets, burst crackers and more importantly they also tend to buy among many other things – GOLD. Gold is always considered to be an auspicious investment during these times as it is believed to bring prosperity & wealth.
But how well Gold has fared in terms of returns over the last few years? Gold is a good instrument as an hedge against inflation as it tend to give return at par with inflation rate. For instance in the last 13 years (since 2005), if you had purchased Gold on the Diwali day, you would have got an average annualized return of 7%. Inflation during the same period was around 6.7%. When you compare GOLD as an investment option with Equities, during the same period of 13 years, NIFTY has delivered around 12% CAGR.