According to a new report by Edelweiss Mutual Fund, the stock market will perform better than gold in the coming three years. The report states that investing in stocks can be more profitable due to the prospects of economic growth. In the last 10 years, gold has outperformed stocks in only 36% of the cases.
The stock market will perform better than gold in the next three years. This claim has been made in the new report of Edelweiss Mutual Fund. The report states that gold has been considered a safe investment in times of economic uncertainty. But, the stock market is expected to flourish in an environment of economic growth. In such a situation, investing in the stock market can be more beneficial now. The report also mentions the Sensex-to-gold ratio. It shows that stocks can overtake gold in the coming years. According to the report, the current economic conditions are favorable for stocks.
Due to the prospects of economic growth, investing in stocks can be more profitable. This is an important point for investors. The reason is that they want to make their portfolio according to market trends. The report says that in the last 25 years, gold has given an annual return of 12.55%. Whereas, BSE Sensex has given 10.73%. Still, the current economic situation is in favor of stocks. The report also shows that in the last 10 years, gold has performed better than stocks in only 36% of the cases. This shows that despite short-term fluctuations, the stock market has given better returns in the long term.
Gold prices are at record highs
However, April gold futures contracts on MCX hit a new record high of Rs 86,875 per 10 grams, showing a rise of 0.21% or Rs 189. Gold prices rose by Rs 2,600 per 10 grams in March. Gold prices in global markets hit an all-time high, driven by safe-haven demand. Fears of a slowdown in global economic growth due to US trade tariffs and retaliation from other countries have boosted demand for precious metals, especially gold.
Gold and the stock market have always been two of the top investment options. While gold is known for its stability during financial crises, the stock market has historically delivered better returns during economic recovery. The Edelweiss report emphasises that the stock market is well positioned to benefit from economic growth. This is likely to lead to a boom in corporate earnings. This makes stocks a potentially more lucrative investment for those looking to maximise their returns in the coming years.
Stocks are a strong asset class in the long term
Edelweiss Mutual Fund's investment outlook reinforces the view that the stock market remains a strong asset class for the long term. However, gold will continue to act as a hedge against uncertainty. However, historical data suggests that stocks may be more beneficial for investors focused on long-term wealth creation. This is in line with long-term trends where stocks have typically outperformed gold. This approach is important for investors who want to optimise their portfolios with expected market trends.
Overall, the Edelweiss Mutual Fund report suggests a strategic shift in favour of stocks, driven by economic recovery and growth prospects. As investors evaluate their options, the potential of stocks to deliver higher returns than gold is an important consideration. This investment approach, along with the historical performance of stocks during economic expansion, makes a strong case for investors to re-evaluate their portfolio allocations in anticipation of future market dynamics.
It is important to note that the market can fluctuate. It is important to consult experts before investing. Invest according to your financial goals and risk appetite.