Should You Invest In Gold Now? How Has It Outperformed Stocks Over Decades?

Gold has once again proven its strength in the world of investments. While the Sensex slipped 1.2% over the past year, gold rewarded investors with a stunning 50.1% return. This is not just a short-term trend—over the past 3, 5, 10 and even 20 years, gold has consistently outperformed the Sensex. With central banks around the globe also buying gold in bulk, the yellow metal has cemented its place as a trusted asset.

Numbers make it clear—gold has beaten the stock market across time frames. Over three years, gold delivered 29.7% average returns compared to Sensex’s 10.7%. In five years, gold edged ahead with 16.5% versus 16.1%. Over a decade, gold gained 15.4% against Sensex’s 12.2%, and even across 20 years, gold held at 15.2% while Sensex stayed at 12.2%. Whether short or long term, gold has remained the more stable, reliable bet.

Why are gold prices rising? Experts point to multiple factors: countries are boosting reserves with gold instead of dollars, it protects against inflation and currency swings, and global uncertainty adds to its shine. The US Fed’s possible rate cuts and trade policy worries have only made investors turn to gold as a safe haven.

Think starting an investment plan at 30 is too late? Not at all. With the right financial strategy, you can still build wealth worth crores. The key is a diversified portfolio, allocating a steady share to gold, and investing with a long-term vision.

Experts caution that while gold has surged recently, the same scale of returns may not continue. A smart move is to allocate around 10-15% of your portfolio to gold and buy when prices dip. That is when gold becomes even more rewarding.

Another insight: gold is currently priced slightly higher than equities. Historically, when the gold-to-Sensex ratio fell below 0.8, the Sensex delivered over 25% average returns over the next three years. This means, the stock market still holds solid opportunities alongside gold.