Everyone's buying gold. Should you?

Rahul Mehra, 36, has done well for himself. He is currently investing Rs 18,000 per month in equity mutual funds. Today, that discipline has resulted in a corpus worth Rs 24 lakh. Add Rs 6 lakh in fixed deposits (FDs) and Rs 7 lakh in EPF (Employees' Provident Fund), and Rahul's portfolio looks solid. Rahul is investing for two things: a financially secure retirement around age 60, and a potential second home purchase within the next 5-7 years. A major portion of his money is in equity and a dash of the capital lies in fixed-income investments. But lately, gold has been on his mind. With the metal's price touching record highs - up over 18 per cent in the last six months - and friends bragging about their gold investments, Rahul is starting to wonder if he's missing out. So, should he go about and add some sparkle to his portfolio? Our advice Gold is not a growth asset. Unlike other compounding assets, gold doesn't pay interest (like fixed-income investments do), dividends (stocks) or rent (properties). That said, gold can still play a protector's role in a portfolio. It can work as a hedge during times of market stress or geopolitical uncertainties, and because it often does well when equity markets are falling. Hence, a modest allocation - say 5

This article was originally published on May 16, 2025.