Between 2019 and 2025, Indian equities have demonstrated a strong performance, delivering significant returns to investors. While gold has traditionally been considered a safe-haven asset, particularly during times of economic uncertainty, Indian equities have, over the long term, showcased their potential for wealth creation.

Equity Performance:

Over the period between May 2019 to June 2025, gold prices in India jumped from nearly ₹30,000 to over ₹1,00,000 per 10 grams. This shows that gold prices have given a stellar return of over 200 per cent in about six years, compared to about 120 per cent return by the Nifty 50.

Indian equities have delivered superior returns over longer time horizons. For example, the Nifty 50 has achieved a 13% yearly price increase and a 14.4% total return (inclusive of dividends) across 20 years, surpassing gold's performance during comparable timeframes. Moreover, over 10- and 20-year periods, Indian equities have consistently outperformed gold. The Sensex has delivered average 10-year rolling returns of 13.55%, compared to gold's 9.85%.

Factors Driving Equity Outperformance:

Several factors have contributed to the strong performance of Indian equities. India's economic growth, driven by structural reforms and a thriving digital sector, has created a favorable environment for businesses and investors. The government's focus on financial inclusion and fintech innovation has further fueled this growth.

Gold as a Safe Haven:

Gold has traditionally served as a safe-haven asset, offering stability during economic downturns and geopolitical instability. In the financial year 2024-25, gold was the best-performing asset class, recording a 41% gain in USD terms and 33% in rupee terms. This surge was driven by its safe-haven status and substantial central bank acquisitions.

Balancing Risk and Return:

While gold can act as a portfolio stabilizer during turbulent times, equities offer the potential for higher returns and long-term wealth creation. Therefore, a balanced approach that combines both asset classes may be the most prudent strategy for investors.

Expert Opinions and Market Outlook:

Some experts predict that equities will likely outperform gold over the next three years, especially if economic expansion continues and inflation moderates. However, other analysts believe that gold may continue to perform well due to ongoing global uncertainties and central bank buying.

Conclusion:

Indian equities have demonstrated their ability to deliver significant returns, outperforming gold over the long term. While gold remains a valuable asset for diversification and risk management, the growth potential of Indian equities makes them an attractive option for investors seeking long-term wealth creation.