Gold outperforms Sensex; spikes 672% in 15 years

Long-term investments are always rewarding but the gains certainly differ across the asset classes. In case of gold and equities, the deviation works out to be Rs 2 lakh over the last 15 years. Consider this: A lumpsum investment of Rs 1 lakh at the start of June 2005 would have grown to Rs 5.2 lakh by June-end this year in equities (using Sensex as proxy), whereas the same amount would have fetched you Rs 7.7 lakh if invested in gold for the same duration.

This translates into an average growth rate of 12 per cent during the last 15 years for equities while the investment in the yellow metal delivered a compounded annual growth of 15 per cent. In absolute terms, investments in both these assets classes were up by a whopping 420 per cent and 672 per cent, respectively.           

Gold considered as a safe haven for investors surged to its highest in nearly eight years on Tuesday. The prices of the yellow metal jumped almost 25 per cent in just six months. "Escalating geopolitical tensions, concerns of a quick global economic recovery and a weak US dollar will continue to lift the safe haven demand and thus prices of gold. However, investors may take a cautious stance ahead of the key US employment data scheduled later during the day," said Hareesh V, Head commodity Research at Geojit Financial Services in a note.

Equities too have put up their best show recently enjoying a swift recovery from its March lows. The benchmark index Sensex posted its best quarterly total return since 2009, gaining 19 per cent as equities rallied globally from their first quarter sell-off. It ended at 36, 021 points on Friday with a gain of 2.4 per cent during the week.

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