Gold, Equity, or Real Estate: Which Investment Has Yielded the Most in 20 Years?
Over the past two decades, gold has outperformed both equities and real estate, providing the highest returns to investors. A Rs 1 lakh investment in gold in 2005 would now be worth approximately Rs 16.3 lakh.
GoldEquitiesReal EstateInvestmentReturnsReal Estate NewsOct 15, 2025
According to a new report by FundsIndia, gold has given investors the highest returns in the last 20 years. Over the last two decades, the precious metal has gained a 15% annual average return (CAGR). This means that someone who invested Rs 1 lakh in gold in 2005 would have made approximately Rs 16.3 lakh today.
The stock market (Nifty): With a 13.3% annual return, equities have increased investors’ wealth 12.1 times. So an investment of Rs 1 lakh would be worth Rs 12.1 lakh in 20 years.
Real Estate: The return from this has been 7.7% annually. This means that the money has increased only 4.3 times in 20 years. In comparison to gold and equities, realty prices have not risen that much, turning Rs 1 lakh investment into Rs 4.3 lakh in 20 years.
The picture is clear – the comparison shows that gold has outperformed both equities and real estate in the long run.
Why has gold remained ahead? Over the past two decades, gold has remained a “safe haven” for investors amid the global economic crisis, inflation, interest rate fluctuations, and geopolitical tensions. Whenever market uncertainty increased, investors turned to gold. This is why its prices have consistently risen. The year 2025 is a great example of this gold rally.
Over the long term, equities have also performed well, with a 13.3% CAGR (NIFTY50). Those who invest through SIPs or regular investments have made good profits. However, real estate has been slower than expected. After a boom in the initial years, prices have stagnated over the past few years, leading to a decline in average returns.
According to the report, gold’s returns have been better than those of equities and real estate not only in the past 20 years, but also in the past 10 and 15 years. The precious metal has returned 16.6% CAGR in 10 years and 12.4% in 15 years. In contrast, the equity market (NIFTY50) has given 13.3% and 11.2% CAGR in the last 10 years and 15 years, respectively. As regards real estate, returns from property investment have not been that good, with 5.1% and 5.9% CAGR in the last 10 years and 15 years, respectively. This means that investors who have invested in gold for a long time have benefited more than those who bought equities and real estate.
Lessons for Investors: This report shows that diversification is essential. Relying on just one asset class is not wise. Although gold has delivered excellent returns over the past 20 years, the future performance of each asset may vary. Investors should maintain a balance of equities, gold, and real estate in their portfolios.
Conclusion: Over the past 20 years, gold has made investors the wealthiest. If Rs 1 lakh had been invested in gold, it would have been worth more than Rs 16 lakh today, whereas the same amount would have been worth Rs 12 lakh in shares and around Rs 4 lakh in property.
Frequently Asked Questions
What has been the highest performing investment over the past 20 years?
Gold has been the highest performing investment over the past 20 years, with a 15% annual average return (CAGR).
What is the CAGR for equities over the past 20 years?
The CAGR for equities (Nifty) over the past 20 years is 13.3%.
How has real estate performed compared to gold and equities?
Real estate has had a 7.7% annual return over the past 20 years, significantly lower than gold and equities.
Why has gold been a preferred investment during economic crises?
Gold is considered a 'safe haven' asset. It tends to perform well during economic crises, inflation, and geopolitical tensions, making it a preferred investment during uncertain times.
What is the importance of diversification in investments?
Diversification is crucial as it helps manage risk and can lead to more stable returns. Relying on a single asset class can be risky, and a balanced portfolio of equities, gold, and real estate is recommended.
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