@ChaitanyaC , Read all of the articles posed by you and some more from Pattu;s website…
Gold reduces returns and still more risky ( More volatile) than stocks in the long run.
So both the objectives, 1) Diversification effect by adding inversely co-related asset
2) Stability of returns , are not achieved by Gold. Most of the past returns in Gold have been due to exchange rate fluctuations of dollar and rupees, which mostly not repeat in future. So by adding gold in portfolio, I am reducing my overall returns and increasing volatility in the long run.
In case of silver, Its giving 1% more return than gold , but volatility is double than that of gold…So its also out of question.
Thanks for this…I had almost made up my mind to put 20% portfolio in gold ETFs.
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