Gold has outperformed equities globally over the past 24 years, but India remains an exception, according to data from DSP and Bloomberg. While gold has historically been a safe-haven asset, Indian equities have delivered better long-term returns.
Data reveals that 43% of Indian stocks have outperformed gold, compared to just 29% in China and 11% in the U.S. India’s equity market has delivered a 13.4% CAGR over 24 years, surpassing gold’s 12.5% CAGR. In contrast, developed markets like Japan, the UK, and the U.S. have seen gold outperform equities by 6-7 percentage points.
Despite equities’ dominance in India, gold has played a crucial role in hedging against market crashes. Historically, gold has gained 10-30% during every major Indian equity downturn of 20% or more. Furthermore, gold is 50% less volatile than Indian equities, offering better downside risk-adjusted returns.
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Globally, gold remains a strong alternative to equities, particularly in volatile markets. However, for Indian investors, equities have been the better long-term bet, although gold still holds value as a diversification tool.
Commenting on this, Adhil Shetty, CEO of Bankbazaar.com, said, “Gold has long been considered a safe-haven asset, but for Indian investors, equities have historically delivered superior returns. However, gold remains crucial for portfolio diversification and risk management, especially during market downturns. Gold is a hedge against volatility and inflation, but Indian equities have created more wealth over the long term. Investors should view gold as a protective asset rather than a primary growth driver.”
For investors, thus, a balanced mix of equities and gold can maximise returns while reducing risk, ensuring long-term financial stability.
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