Is buying or investment in Gold really Gold today?

Is buying or investment in Gold really Gold today?Gold is always considered to be a Investment bet & considered as a hedge against inflation. We have seen people generally value gold in terms of Dollar and not in the form of Rupee. Now if we as a investor go back in the history & try to make out some conclusions, it has been found that in the year 1975-1979, gold had a big bull run which nobody expected.

It moved from from $120 per ounce in 1975 to around $950 in 1982, it had touched a all time high as $1450 per ounce today in April, 2011. Now what happened between the years of 1980 to 2000. It almost stablised as Equity markets started performing quite well as compared to Gold & investors became bullish on equities around the world

But when the inflation had eased out, Gold came crashing down. In the year 1990, gold prices came to $420 per ounce and in the year 2000, it was close to $255 per ounce. It means it was just a bubble that got burst later afterwards. I suggest you to not be surprised if you will be able to buy gold again at levels of Rs 10000-12000.

In the past 10 years, Gold has delivered a CAGR return of 18.5% per annum. If you dont believe , Gold was at $250 per ounce & around 1300 at 2010 year end.

As a true & ethical financial planner, I have provided you with true data of Gold from history from 1976 to 2010, its upto you to take a call whether one should invest in this precious metal or not.
Mayank Gupta, Founder at Wealth Bazaar Financial Managers advises every investor to have atleast 15% of assest allocation of gold in his/her portfolio to protect it from bad times in the economy


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