Singhal highlighted that the Nifty-to-Gold ratio has been at its most oversold in the past five years. Looking at historical trends, he noted that in February 2009, the Nifty rose 136 per cent over 21 months; in August 2011, it gained 93 per cent in 43 months; and in March 2020, it increased 147 per cent in just 19 months. On average, equities delivered a 125 per cent return over 28 months after such points that showing how equities have historically outperformed gold following similar market conditions.
Ashish also noted the investor sentiment often moves in the opposite direction of long-term wealth creation. At a time when history suggests equities have delivered average returns of over 125 per cent in less than three years after similar gold-to-Nifty ratios, many families are pausing their SIPs and diverting money into gold and jewellery. As he put it, ‘gold is safe, beta. Markets are risky.’ Yet, the data repeatedly show that disciplined equity investing during such phases has outperformed.
Singhal highlighted how investor behaviour often works against long-term wealth creation. “We want more of something when it is at its priciest, and we shy away from what is cheapest. Buy high. Sell low. The oldest mistake in the book,” he wrote. He added that historical data shows that when gold feels safest, equities have often delivered the best returns, underlining the contrast between perception and reality.
He also emphasised the Importance of staying disciplined with investments. While this is not financial advice, he asked readers to think about it: your SIPs have been quietly buying the Nifty at lower levels all year, while everyone else has been chasing gold at higher levels. He ended by saying that sometimes the most boring habit, sticking with your SIPs, might end up being the smartest one.
