Gold worth in the present day: Veteran inventory market investor Shankar Sharma cautioned traders in opposition to falling prey to recency bias — particularly in terms of investing in gold.
In a candid submit on social media platform X (previously Twitter) on Could 28, Shankar Sharma shared a private anecdote from his teenage years, recounting how his very first funding determination — placing cash into gold — turned out to be, in his personal phrases, an “utter catastrophe.”
Following his father’s passing, Sharma had sought monetary steering from the State Financial institution of India’s (SBI) supervisor at its fundamental department in Dhanbad. The supervisor suggested him to transform his small fastened deposits (FDs) into gold, promising higher returns. Trusting the recommendation, Sharma made the change.
Nonetheless, he mentioned that over the subsequent twenty years, his returns have been half of what he would have earned from FDs.
In 1981, gold costs hovered round ₹1,670, and rose to ₹4,300 by 2001, producing a CAGR of 4.8%.
Latest gold rush
Sharma’s feedback come at a time when gold has witnessed a meteoric rise in each worldwide and home markets. Within the final one 12 months alone, spot gold costs in India have surged from practically ₹72,000 ranges to the milestone of ₹1,00,000, delivering 40% returns.
In keeping with a report by the World Gold Council, gold demand remained agency within the first quarter of 2025 and was the best for the primary quarter of the 12 months since 2016. A variety of things like US tariffs, geopolitical uncertainty, inventory market volatility and US greenback weak spot aided the gold demand.
Whereas gold has certainly carried out nicely in recent times, Sharma’s story serves as a reminder of the risks of recency bias in investing.
Sharma’s expertise underscores the significance of avoiding recency bias — the tendency to make funding selections primarily based on current tendencies with out contemplating long-term information.
Ideally, traders ought to strategy asset allocation with a long-term perspective, diversifying their portfolios throughout varied asset courses to mitigate dangers and capitalise on potential returns.
Disclaimer: This story is for instructional functions solely. The views and proposals made above are these of particular person analysts or broking corporations, and never of Mint. We advise traders to verify with licensed consultants earlier than making any funding selections.
