Monday, May 2, 2011

Buying Gold On Akshaya Tritya: A Practical Look

Despite Akshaya Tritya falling in early May, a month when veteran gold buyers traditionally refrain, buying a fixed amount of gold on that day has proven to be wise. Despite the Indian stock market roaring up this past decade, in stark contrast to North American markets, investing in gold over the last ten Akshaya Tritya festivals would have beaten stock-market ETFs.
Akshaya Tritya is one of the holiest days in the Vedic calendar. Legend has it that any venture started on Akshaya Tritya is successful. More importantly, it is considered a good day to buy metals (especially gold), which bring prosperity throughout the year. ET Wealth back-tested this premise and found that if you had bought a fixed amount of gold on Akshaya Tritya in the past 10 years, you would have earned annualised returns of 20.2%. Investments in Nifty ETFs on the same days would have earned 17.3%.

It's an old saw in anthropology that even flagrantly irrational traditions have a functional logic to them. Akshaya Tritya isn't really irrational, but it's still a tradition. Nice to see a secular examination showing its usefulness.

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