Explained: Gold or stock market, which will give the highest returns in the coming days? This is the answer
Gold or stock market... which gives the best returns? If someone asks you this question today, in the current situation people will choose gold, because in the last few years, the returns on gold have not only been better, but it has also been safer than the stock market. What will happen in the future?
Gold has given safe, stable and better returns in the last few years. Since Covid, the stock market has seen a good bull run as well as a dangerous bear slump. In such a situation, will gold continue to give good returns in the future or will the stock market beat it? Let's understand the story…
A report by Edelweiss Mutual Fund, one of the top mutual fund companies in the country, has claimed that the stock market returns will beat gold returns in the coming 3 years. The reason for the outperformance of the stock market has also been given in this report.
Why will the stock market beat gold?
The report underlines that gold has always been a safe investment option. In times of uncertainty, investment in it increases and returns are also better. On the other hand, the return of the stock market depends largely on economic growth. Because of this, the stock market becomes a better investment option.
If we look at the historical data, whenever there is economic expansion in the world, the stock market expands rapidly. The reason for this is that during that period the corporate earnings increase and due to that the value of their shares. Investors get the benefit of this and they are able to get better returns.
the fourth industrial revolution
If you try to apply the point made in the Edelweiss Mutual Fund report in real life, then you can understand it very well with some examples…
In the year 1991, when India's economy entered the era of globalization, new innovations started happening in the stock market. In that era, people made money quickly by finding loopholes in the market.
(Names like Harshad Mehta, Rakesh Jhunjhunwala, Radhakishan Damani and Ketan Parekh came into the limelight during that period).
It was because of this economic expansion that SEBI got strengthened and then it emerged as the biggest protector of investors.
After this, remember the recession of 2008. Despite the global economy crashing, demand remained in the Indian economy. Although the biggest stock market crash was witnessed that year, the Sensex recovered in 2009 itself.
According to a report by ET, 2009 was the best year in terms of returns for people after 2000. This was the period when Indian corporates started making their global identity.
Tata Group acquired companies like Corus and Jaguar Land Rover during this period. This was the new expansion of the Indian economy and the stock market gave similar returns.
Then look at the period of Covid after 2020. During this time, the digital revolution came and the companies working in this segment not only grew, but their earnings also increased.
Reliance Jio is the best example of this. At the same time, the continuous IPOs of digital tech companies kept the market bullish.
At the same time, after the lockdown was lifted, the craze of people from roaming inside to eating outside increased, due to which the retail industry set new parameters of growth.
Now the market is once again moving towards new expansion. Solar energy, electric mobility, sustainability products and artificial intelligence are going to play a big role in this.
This is the fourth industrial revolution, which can become stable in a year or two. Therefore, there is every possibility that the stock market will give better performance in the next 3 years.
