Golden Return

If we look at the price history of gold then it has provided spectacular returns. As per your cover story titled ‘Is Gold a ‘Perfect’ Investment Choice?’, you have suggested to not invest more than 15 per cent in it. I wish to know why such a low allocation to gold?

- Indrakumar Dedhiya

Editor Responds : Gold in the last one year has generated a spectacular return. However, it is not always the case. If you look at the history of gold prices, the return is not as good as equity. Nevertheless, it has a very low correlation with equity prices and hence capping at 15 per cent helps you to smoothen your portfolio returns.