The Sensex as well as gold are trading at elevated levels. With global uncertainties rising and market volatility persisting, navigating these popular asset classes has become complex. And as an investor, you might be contemplating where to place your bets.

The Sensex is currently trading near ₹80,334, while gold has recently surpassed ₹80,000 per 10 grams for 24-karat purity.

Let’s explore which investment could suit your financial goals better.

Market volatility and SIPs: A safe approach

The stock market is known for its unpredictable fluctuations.

Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, notes that volatility stems from a combination of factors.

“Domestic markets are richly valued and susceptible to corrections, while global tensions and worries about economic growth add to the unpredictability of equities,” he says.

In such a scenario, Systematic Investment Plans (SIPs) offer an effective approach, as they allow investors to benefit from market dips without the need to time their investments perfectly.

Haria believes SIPs help investors average out costs, particularly during market drawdowns.

Passive products in Sensex and Gold

For investors looking for passive exposure to the Sensex, Haria recommends BSE Sensex ETFs.

“A Sensex ETF replicates the performance of the top 30 companies in India, providing investors with an easy and efficient way to invest in blue-chip stocks,” he notes.

Gold ETFs, on the other hand, offer a way to invest in the precious metal without the need for physical storage.

“Gold ETFs are backed by 24-carat gold and offer liquidity, making them ideal for investors seeking exposure to gold,” Haria explains.

As a rule of thumb, he suggested a 15-20% allocation to gold in one’s portfolio to balance risks from the equity market.

Gold at all-time highs: Is there more room to grow?

With gold prices soaring, many investors wonder if the rally will continue.

Haria says the outlook largely depends on global monetary policies and geopolitical conditions. “If the US faces a recession, it will require larger rate cuts, which will be very supportive for gold,” he adds.

On the flip side, if the Federal Reserve successfully steers clear of a recession, gold prices may cool off slightly, though downside risks will be limited by ongoing geopolitical tensions and inflation.

For those looking to invest, Haria recommends Gold ETFs over physical gold. “Gold ETFs offer a cost-effective and convenient way to invest in gold without the hassles of purity concerns or storage.”

Value investing

In the face of current market conditions, value investing has garnered attention.

Stocks with strong fundamentals have outperformed growth stocks, and this trend could continue. “With stretched valuations in the domestic market, value stocks may fare better as volatility persists,” Haria observes.

For those keen on value investing, Haria suggests the Nifty200 Value 30 ETF or the Nifty200 Value 30 Index Fund, which offers exposure to 30 undervalued stocks from the Nifty 200 universe.

“These passive options are low-cost and give investors access to value stocks that can complement their growth portfolios,” he states.

An allocation of 5-10% to these products can enhance overall portfolio diversification.

Need for a balanced approach?

In a market filled with uncertainties, both the Sensex and gold offer compelling investment opportunities.

While equities continue to offer long-term growth, gold serves as a safe-haven asset during turbulent times.

A balanced allocation, including SIPs for equities and ETFs for gold, can help investors navigate through volatile times and optimise returns.

For those unsure of timing the market or hedging against risks, Haria emphasised, “A diversified approach remains key to building a resilient portfolio.”