CNBC-TV18 spoke with Feroze Azeez, Co-PDG of Anand Rathi; Chirag Sheth, principal consultant of India at Metals Focus; And Kunal Shah, head of raw material research at Nirmal Bang, to find out their point of view on asset allocation.
Feroze Azeez said that the asset allocation should balance growth and protection. “If you plan to have debts in your wallet, at least half the debt of your wallet should be gold,” he said. Evoking historical yields, he added that even if gold can outperform NIFTY in the short term, over longer periods, actions generally win. He suggested that long -term investors should allocate “at least 75 to 80 % of equity in long -term funds, and the residue divided between debt and gold, 50 to 50”.
For short -term titles, Azeez underlined the solid performance of gold. “If you look at the best yield over a year in the past 15 years, continuously, it has been 58 % for gold and -21 % is the worst,” he said. He stressed that gold is more a commercial instrument or a debt replacement than a long -term actions substitute. Regarding money, Kunal Shah highlighted the pressures of supply and growing demand. “The supply is continuously weakening, and at the same time, demand becomes stronger thanks to solar energy,” he said.
He noted that the main silver mines in Mexico will probably be exhausted by 2026, creating a “perfect storm for raw materials” which makes the forecasting of price movements difficult. However, Shah remains optimistic: “The trajectory of money for the next two years will always be very upside down. And whatever the corrections, the reductions or the profits that we observe over time, these should be used as purchasing opportunities.”
Chirag Sheth said money remains the most interesting raw material, supported by both tendencies in supply and demand. “Essentially, in the past 8 to 10 years, there have been around 500 million ounces of reduction in money stocks. So we really see a resumption of demand, especially due to new uses: photovoltaics, electric vehicles and defense equipment,” he explained. He also highlighted the role of gold as a refuge value in a context of global uncertainty, declaring: “having a negative vision of gold and silver would be hara-kiri”.
Regarding the stock market, Azeez said that shares and gold complement themselves and can be balanced to manage volatility. He noted that despite recent corrections, there is a repressed potential in Nifty. “Whenever Nifty was negative, I took the 12 negative months of Nifty, and during all these 12 months negative, gold was positive. I therefore try to create the hypothesis that these are negatively correlated assets and that they complement each other,” he said.
While Diwali is approaching and market volatility continues, investors could realize that a balanced combination of actions, gold and money – guided by historical trends and fundamentals of supply and demand – could be the way to follow.
Watch the accompaniment video for the entire discussion.
