Gold should form 10% of investment portfolio

Sun Aug 30 2026

Most investors think of portfolio in terms of equity and fixed income. Gold is an afterthought. That approach misses the point. Gold deserves a deliberate, planned allocation of about 10% of every portfolio and here is why.

Long-term data shows gold behaves differently from equity and fixed income in most situations. When equity markets are under stress, gold tends to hold up or even gain. When bond yields rise sharply on inflation worries, gold does well since it is seen as a hedge against currency depreciation. This is the essence of diversification - you don’t want all assets moving in the same direction at the same time.

If you run a portfolio with equity and fixed income and allocate 10 per cent to gold, the math works out in your favour as the overall portfolio volatility drops as gold price movements are not synchronised with the other two asset classes. Risk-adjusted or volatility-adjusted return improves. This is how portfolio construction works when you combine assets that do not move in lockstep. You are adding gold as it smoothens the ride.

Source: https://www.thehindubusinessline.com