Oct. 6: The almost simultaneous spike in gold and stock prices have placed investors in a dilemma on where to invest. On Wednesday, gold and silver prices touched an all time high levels. The BSE Sensex too, closed at 20,543 — a level not seen since January 2008. The euphoria is also evident from the fact that over 20 initial public offerings (IPOs) are expected to hit the market this month. Financial advisors are clear that right now is not the best of times to bring in fresh money to invest in either gold or stocks.
Portfolio rebalancing — or bringing the mix of equity, debt and other assets in your portfolio back to the desired level, is also recommended. A systematic approach for investors, which means investing relatively small amounts on a regular/ monthly basis would be ideal. The recent peaks scaled by gold and equities are good for the trader but not an investor unless he or she is already in the market, said Mr Jagannadham Thu-nuguntla of SMC Capital.
Fresh investments will be a mistake, he feels. Those who are invested should also book profits at these levels, he said. Most experts feel that gold prices will remain strong as long as the Western economies are weak. However, gold prices could see a correction says Mr Rajesh Mehta a gold importer. One approach for investors to cut their risk right now could be to split their funds between gold and stocks says Mr Alex Mathews of Geojit BNP Paribas.