Indian households consider Dhanteras as an auspicious occasion to purchase gold. Dhanteras, which is also known as Dhantrayodashi, is the first day of these five-day long festivities. This year, Dhanteras will be celebrated on Saturday, October 22. Many people would be planning to buy gold on this year’s Dhanteras as well. Here are some calculations that will show you the returns of gold bought on Dhanteras over the years generated in the medium to long-term.
Gold investment has done well in the long run when the purchase is made on this auspicious day, an assessment suggests. Gold has performed very well in the last 20 years. It is 13 times higher from 1990 and 10 times higher from 1990 and 10 times higher from 2000. Thus, a long horizon gives fantastic results, ET quoted Surendra Mehta, secretary at the India Bullion and Jewellers Association (IBJA), as saying.
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Investment made in gold 5 years ago on Dhanteras would have fetched absolute return of 70% as on October 14, at a CAGR of 11.2%. The CAGR for the 15-year and 25-year periods are 10.9% and 10.4%, respectively. The only period for which the long-term CAGR is a bit muted is 10 years, at around 5%.
Dhanteras offers good way to diversify investment portfolio
If your investment gives a return that is lower than inflation, then your investment is losing its value in real terms as things are getting costlier at a faster pace than the growth of your investment. Gold is known to work well against inflation.
Depending only on equities or debt may not be the ideal way to deal with financial investment as market cycles can often bring higher volatility in these financial assets and skew your returns adversely. Adding gold brings some balance and more stability to the financial portfolio.
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“A good investment portfolio is diversified and is designed to maximise returns and minimise risks. Gold works as a great hedge against inflation, geopolitical risks and market crashes. Rising inflation and currency volatilities generally result in a rise in gold prices. Given its low correlation to most other investment instruments, it is beneficial to have gold in your portfolio for the long term,” says Dilip Jain, Co-founder, Gullak, a financial services platform.
