Investing in gold are safer than investing in stock markets

It may seem obvious that Indian stocks are a much better investment than gold, but are they? Stocks sometimes provide a dividend and hopefully have earnings, but gold has neither. Is it even worth the comparison you may ask? Let us look at the facts. The results will likely surprise you and give good credence to why you should listen to your parents when they talk about investing in gold. Indians of different generations have been the largest buyers of gold worldwide for over 50 years and are estimated to own over $1.2 trillion or over Rs 87 lakh crore of gold. That is about half of the size of the entire Indian stock market capitalization and about 10 per cent of all the gold in the world.

· Indian stocks have historically had higher returns than gold;

· Gold is less risky than Indian stocks;

· Indian stocks historically have far more 20 per cent drawdowns than gold;

· Gold and Indian stocks tend to behave differently from each other in times of stress;

· This balancing or offsetting of risk between Gold and Indian stocks is good for investors.