Investors With Overweight Position On Yellow Metal May Move Money To Equities: Here's Why

Investors, who have significant overweight position on gold, may reduce their exposure into the safe haven, and move some of the investment to equities, said Sunil Singhania, founder, Abakkus Asset Manager said. Singhania believes that the one-year return on gold and silver will likely be negative.

He said that any time is a good time to invest in equities. This is the only asset class, which will give double-digit return consistently. Retail investors matured significantly, which is proved by the consistent flow of SIPs. ''Now, they understand that equity markets do not give short-term return, but it's a good investment for long term,'' he said.

When the Indian markets did exceptionally well from 2020 to 2024, people expected the trend to continue. When the trend did not continue, it acted as a dampener. Investors are pretty okay to make 12–15% returns, compounded year-on-year, he said.

Equity markets always have phases. Most of the phases have been great for Indian equities, but there are some phases where markets do not make money for investors. In some phases, equities can give a negative return. 

Last one year has been that phase. Given uncertainty, Indian markets have done pretty well. People have neither gained money nor lose it. "Samvat to Samvat equity returns are almost equal to fixed-income return," he said.

As human beings are naturally greedy, they tend to compared it with China, Gold, and Silver. As far as the Indian economy is concerned, it went through some tough times last year. When elections happen, things slow down. September quarter of last financial year was very soft in terms of GDP growth of 5%, and corporate profit growth of only 3%.

Most quarters post that looks well. India is a little behind in terms of corporate profit growth but GDP growth has turned out well.