Should you invest in gold even at current levels?

Below is the verbatim transcript of Gaurav Mashruwala's interview on CNBC-TV18

Q: I and my husband have LIC policies and term insurance and now we want to buy mutual fund, so which one is better?

A: There is less risk in the market right now so if it has to fall, how much more. In giant wheel people get scared at the top and not at the bottom and in stock market it is reverse, people get scared at bottom. So, if you are saving for some financial goal, which is likely to happen in seven to nine years or even earlier like four-five years and starts in systematic investment plan into equity fund, you should be fine. If you have requirement nearer to that then equity fund is not a good option otherwise it is perfectly alright.

Index fund would be replicating index, so less volatile compared to an actively traded fund, depends what kind of time and skill one has or may even split. So, your core portfolio could be into an index fund or a Nifty fund or a Sensex fund and you can still take extra exposure into actively managed funds.

Q: Is it advisable to invest in gold at these levels?

A: The portfolio should have all the asset classes, debt, equity and gold to that extent should be part of one's portfolio. If you already have gold and because of valuations going up, its kind of skewed in favour of gold than liquidate. But if you do not have it then keep on adding at regular basis because that is one asset class which does not have any direct correlation between debt and equity. So, debt and equity has inverse correlation, gold has its own path and to that extent, on overall portfolio it acts as a balancing factor.