Got a bonus to invest? Gold at record highs and markets choppy, this 50:50 formula may work better

Received a bonus recently and wondering where to invest it? You are not alone. Many investors are facing the same dilemma as markets remain volatile amid the ongoing Middle-East crisis, making market-linked investments such as mutual funds less rewarding in the short term. Fixed deposits offered by PSU and private banks are currently yielding around 6% to 7.5%, which many investors may not find attractive enough. Small finance banks are offering higher returns of nearly 8.5%, but they come with relatively higher risk. Gold, on the other hand, looks appealing, but soaring prices provide no entry point. Adding to the confusion is the absence of Sovereign Gold Bonds (SGBs), leaving many investors uncertain about investing in digital gold due to the lack of clear regulatory safeguards. In such uncertain and confusing market conditions, it is often better to stick to a simple, disciplined formula regardless of how the market moves. Avinash Luthria, SEBI Registered Investment Adviser at Fiduciaries, suggests if you are looking to deploy a large lump-sum amount, a simple and disciplined approach may work better than trying to time the market. “No matter what the state of the stock market is, put half of it into an Arbitrage Fund as a long-term investment and invest the other half via a new 12-month SIP, in any Nifty 50 Index Fund.” The Arbitrage Fund helps reduce risk and protects part of the capital during volatile phases, while the staggered SIP approach into a Nifty 50 Index Fund avoids poor market timing and allows investors to benefit from long-term equity compounding. No matter how volatile or uncertain the market may appear in the short term, markets tend to stabilise over time and have historically delivered positive returns for investors who remain invested with a sufficiently long time horizon. A recent report by FundsIndia found that Indian equities delivered annual returns of 13.2% over 10 years, 11.3% over 15 years and 11.4% over 20 years. At that pace, investments would have multiplied roughly 3.5 times in 10 years, 5 times in 15 years and nearly 8.7 times over two decades. US equities performed even better, delivering annualised returns of 19.4% over 10 years, 19.8% over 15 years and 15.2% over a 20-year period, with money multiplying at 5.9x, 15x and 17.01x over similar periods. As compared to that, real estate provided a return of 5.6% and 7.9% in 15 and 20 years and debt instruments provided returns in the range to 7.5% to 7.6% over the same period. Gold also delivered impressive long-term returns, generating 14.6% retuns over 20 years and multiplying investments by more than 15 times. However, even that strong performance could not beat returns generated by US equities over the same period. The markets have witnessed at least two major crashes over the period that we are considering – 2008 and 2020. During the 2008 global financial crisis, Indian markets plunged over 50% as the collapse of Lehman Brothers triggered panic across global economies. And, in 2020, markets crashed nearly 40% within weeks due to Covid-19 fears and lockdowns. Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player. Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. 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