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Q. I have ₹5 lakh with me. Will it be wise to invest in gold for 20 years such that this will grow to ₹3-₹4 crore? Amit Kumar YadavA. There are two aspects here. The first is the return you’re expect

A. There are two aspects here. The first is the return you’re expecting is unfortunately far too high. You are unlikely to reach your goal with your planned investment amount. For ₹5 lakh to grow into ₹3-₹4 crore in 20 years, you will need an annual return of 23-24%. To put it in perspective, consider all 10-year periods over the past 30 years. In only about 2% of these has gold given more than even 20%. Yes, there are bursts when gold may rise very sharply by 50-80%. But these periods are almost always followed by periods of low returns. These ups and downs even out return over the long term. Gold returns have tended towards 10% or lower over the long term. If you consider stocks, the same trend holds as well. The Nifty 50 has very few periods where 10-year or 15-year returns are above 20%. Your other investment options are fixed-income instruments such as deposits or debt funds, which are obviously not going to deliver the return you’re looking for. Assuming a reasonable 12% return, ₹5 lakh would grow into about ₹48 lakh in 20 years. To reach ₹3 crore, you must invest about ₹4 lakh a year. For now, invest the ₹5 lakh in a mixture of large-cap, flexi-cap and mid-cap/small-cap mutual funds. Let the maximum exposure to the mid- and small-cap funds be 30%. This is assuming you have a high risk appetite and are willing to hold through market falls, and that you already have low-risk debt investments. Else, reduce mid- and small-cap exposure. Use SIPs or STPs over the next 6-8 months to reduce timing risks.