For any portfolio, asset allocation is very important.
You need to have a diversified portfolio with investments in different assets like Bank Fixed deposit or Bank Recurring deposits/Govt secured bonds/ PPF/Insurance/ Mutual funds/Shares/Gold/Real estate.
Gold has been one of the most favourite assets.
Post the dot-com bubble crisis in 2001-2003 and global financial crisis 2007-2008, there has been global demand for gold. The global demand for gold has increased from 2008 until today. Of late, due to the pandemic, Central Banks around the world have brought gold. Hence the demand for the metal has gone up to a great extent.
Gold has given quite a decent return when compared to the price in 2010 and today.
In recent times, gold prices are experiencing correction due to:
> Vaccine announcements for COVID19 from countries, primarily from Russia right now. This is upped risk sentiments and safe assets like gold are low on demand.> Expectation of a fiscal stimulus for the US economy and the associated selling of bonds by investors.
Markets are moving very abruptly and market dynamics are also changing. Therefore investment in gold is attractive from a long term perspective.
You can invest in physical gold or in sovereign bonds. You can also look at gold exchange traded funds. If you want to know more about investments, contact me at venkat@prudentconnect.com
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