Stocks, Bonds or Gold? - My Thoughts...!!!

I receive one common query in diffrent ways every other day from lots of readers.

"Should I Invest in Stocks, Bonds or Gold?"
"Recently, Gold has outperformed all the other Asset Classes. Should I shift my money from stocks to Gold?"
"I think Gold will be a good bet because it is outperforming since last 5 years."
"Gold is the basic Asset Class so if stock market collapses, we can use Gold to Buy & Sell things. Is my thinking Correct?"

Several of you have the same queries right? So let us today solve your query about Stock, Bonds & Gold.

In Jeremy Siegel's book Stocks for the Long Run, he reveals what would have happened to a single dollar invested in bonds, stocks and gold since 1801:

- One dollar invested in bonds in 1801 would yield $13,975 today.
- One dollar invested in stocks in 1801 would be worth $8.8 million today.
- One dollar invested in gold in 1801 would be worth $14 today.

While choosing an Asset Class for Invetment, one should see a very long past record of its performance say for example, 70 years to 100 years. You can not say that, Gold is outperforming since last 5 years so in the whole future it will outperform any other Asset class.

The above data are of US Stock market but if we discuss about the Indian stock market than the figures will be the same.

Og course, you can allocate some amount of your Portfolio (Max. 10%) to Gold but the Core Long term Investment Holding of anyone's potrtfolio MUST be that of Equity. And Short-to Medium Term (1-5 Years) Bonds.

The Famous Finance Guru, Dave Ramsey says,

" Gold is a volatile, precious metal—it's flighty and can fluctuate sharply. You're much better off owning mutual funds and paid-for real estate. If you are beyond Baby Step 3 and want some gold, just save up and buy yourself a gold watch!

Just because we're in a bear market doesn't mean the stock market is on its way to collapsing! In order for the stock market to crash, companies like Microsoft, Ford, GM, Home Depot, GE and Whirlpool have to close their doors for good. Can you honestly imagine all of those companies closing? Our stock market operates differently now than in 1929; there are many more safeguards now. The people who predict stuff like this are doomsayers.

The best way to invest is to put your money in growth stock mutual funds that have good long-term track records. This is what I do. The stock market has averaged a growth rate of about 12% per year over the last 70+ years. That doesn't mean a solid growth curve of 12% each year is guaranteed. It means one year the market might grow 7%, the next year 10%, and the next year 19%. That comes out to 12% per year. Since you leave money in an investment for several years or even decades, odds are extremely high that you'll come out a winner!"

So Equity is still the Best long term Investment Vehicle....!!!