Gold vs Equity: Which is better when the markets are struggling?

India is traditionally a market filled with investors who prefer physical assets over financial assets. This behaviour has its own pros and cons and as more and more people are becoming aware of the growth opportunities that stock market investments provide, many have started trusting these forms of investment. 

But a common concern that investors have is the risk associated with investing in stocks. The world hasn’t forgotten the economic hardships of 2008 and investors are concerned about the sustainability of their stock market investment if such a situation is to happen again. And many believe investing in gold is actually a better alternative here. But how much truth is there to this thought? Let’s find out. 

Historical performance

Gold has always been known to safeguard an individual’s investment. In fact, experts believe that India’s gold reserves are what saved the economy from a catastrophe during economic difficulties, including the one in 2008. The economic crisis has favoured gold and the prices have seen a steady improvement after the period. In the economic slowdown after the 2008 financial crisis too, gold lead the way with rising prices as a sure shot way to hedge against the slowdown.

Equity investments 

But that doesn’t mean gold is an option only during a period of struggle. Equities and stock markets have evolved a lot and investors have multiple options for investment. The key remains in diversification. When you diversify, a downfall in one or two sectors will not have a huge effect on your portfolio. It makes sure there is a backup if something goes wrong with one or two companies or sectors.

Mutual fund investments become important too in these times as they offer great diversification. Some mutual funds invest in both equities and debts to make sure there is a risk and return balance. This debt component could help you tremendously during times of economic difficulties. 

Online gold

If you believe that gold is what can save your investments during a difficult period, you could try buying gold online instead of physical gold. Online gold makes storage easy, and it comes with no making charges. Also, you wouldn’t have to worry about purity, and it is not in physical form. You can easily buy gold online using multiple platforms, the most common being sovereign gold bonds. They are government-issued securities that are denominated as grams of gold. Not only that it makes storage easier, but it will also give you a 2.5% for your investment every year.

What should be your choice?

Your choice here is entirely dependent on your investment horizon. At the end of the day, the potential each investment option has and the risk it carries should match with your goals and risk appetite. To figure this out, you can always take the help of a financial advisor. These experts will help you come to a conclusion by analysing your goals and risk appetite. Thanks to the internet, finding help online is also easy.


Gold has got years of trust and has a proven track record of saving investment during any financial crisis, but past performance might not always be indicative of the future. Hence, it is extremely important to make sure you diversify your portfolio. Make your choice and invest today!

Deny Smith

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