GOLD VS SENSEX RETURNS
Gold is the asset class which can be seen in almost every household. It’s the most trusted asset for years & every year you add more to your portfolio in the form of jewellery. And once you buy it, you never sell it.
But when it comes to equity or equity linked mutual funds, you hardly buy it. And if you buy it then you track it at every point in time and look for opportunity to exit it.
Let’s have a look at following chart. The chart shows that price of 10gm of gold back in year 1979 was Rs.937. In the year 2017, price of gold has become Rs.28,000 per 10 gm. Rate of return for this investment comes out to be 9.27% per annum.
Whereas during the same time period, sensex has given close to 16.25% return per annum.
|DATE||GOLD PRICE (Rs.)||SENSEX|
|April 1, 1979||937||-100|
|July 17, 2017||28000||32000|
Let’s have a look at the present value of Rs.10,000 invested in year 1979 both in Gold & Sensex.
Investment year: 1979
Current year: 2017
Investment Time: 38 years
Amount invested: Rs.10,000
Gold: Return in 38 years Rs.3,00,000
Sensex: Return in 38 years Rs. 30,00,000
3 lakh vs 30 lakh in 38 years. That’s a huge difference.