Domestic equity markets have seen a decent correction in the last few sessions with BSE Sensex hovering around 72,600 levels after hitting highs of 75,125.
Market participants, largely suggest investors to buy both gold and stocks on dips to make a balanced portfolio with diversification.
Akshaya Tritiya falls on Friday, May 10 and the day is often considered to be an auspicious day to buy gold to bring long-lasting luck. However, the recent fall in the equity markets is attracting investors to put money in some good stocks to maximize their returns and create wealth.
Market participants largely suggest investors to buy both gold and stocks on dips to make a balanced portfolio with diversification. Experts advocate both the asset classes amid the current volatile scenario but they believe that both the asset classes may current further on the back of domestic and global triggers.
Domestic equity markets have seen a decent correction in the last few sessions with BSE Sensex hovering around 72,600 levels after hitting highs of 75,125. Similarly, gold topped Rs 73,000 mark in April 2024 but has lost its sheen slightly, leaving investors guessing about its trajectory.
Sugandha Sachdeva, Founder of SS WealthStreet, a Delhi-based research firm, advised investors to exercise patience and wait for corrections in good quality stocks, as they present a favorable risk-reward ratio for medium-term investors.
Sachdeva emphasized the positive underlying fundamentals and macroeconomic indicators for India, suggesting that investors stand to benefit from equities in the long run, even as we anticipate a healthy correction in domestic equities post-elections. She favors real estate, metal and IT stocks from a medium to long-term perspective.
On Akshaya Tritiya, a surge in gold purchases is seen across the country. However, it is a prudent approach for investors to allocate funds in any asset class with strong research and not solely based on auspicious timing.
An ideal portfolio should have a diversification across all asset classes to increase risk adjusted returns, said Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions. However, if someone is under-allocated in gold, one should definitely look around to buy gold on this auspicious day of Akshay Tritiya, he said.
“Overall fundamentals are very positive for gold on escalating geopolitical tensions, the Chinese gold rush, record purchases by central banks, concerns over sticky inflation, soaring US government debt, and continued fiat debasement Gold prices are expected to generate a 12-15 per cent return by next Akshaya Tritiya,” he said.
Gold has been the equivalent of ‘comfort food’ in the investment space with high share of mind and wallet in times of uncertainty and volatility due to its hedging nature and emotional association, said Devam Sardana, Business Head, Lemonn, a discount broker which forayed into F&O trading on the platform at zero trading brokerage.
“Over a longer horizon, the Indian equity markets have rewarded through cycle investors with stellar returns. For investors looking to choose between gold, equity and other assets, the basics remain the same – choose according to your risks, do your own research, don’t be blinded by emotion or narratives and always diversify,” he said.
Long-term investors can consider allocating funds to gold as the yellow metal is in a persistent uptrend, and it may bounce from lower levels. Sachdeva from SS WealthStreet. “Gold may test levels of Rs 80,000-84,000 by next Akshaya Tritiya on the back of consistent central bank buying, anticipated interest rate cuts by the US Fed, and lingering geopolitical risks in the world. However, near-term corrections cannot be ruled out.”
While India’s capital markets gear up to outshine global markets, this akshaya Tritiya offers an opportunity to consider the timeless security of gold, said Kresha Gupta, Director, StepTrade Share Services. “Amidst market uncertainties, gold shines as a safe option, promising potential gains and stability,” she added.
