'Don’t buy gold yet': ICICI’s S Naren says this investor move always ends in disaster

Investors chasing gold and silver after recent highs could be walking straight into a long-term disaster, warns S Naren, Chief Investment Strategist at ICICI Prudential Mutual Fund. In a podcast with ET Money, Naren cautioned that buying into precious metals after a rally reflects “anti-asset allocation” — a behaviour pattern he says consistently ends badly.

“Anti-asset allocation normally leads to disaster,” Naren said, referring to investors who pour money into an asset class only after it has performed exceptionally well. “It doesn’t go wrong in the short term, but in the long run, it does.”

The remarks come as interest in gold and silver ETFs surges, with both metals outperforming equity over the last year. But Naren argues that this recent outperformance is exactly what should make investors cautious — not enthusiastic.

“If you woke up to silver two and a half years back, that would have been great — silver had done very badly then,” he said. “But now people wake up to silver. Does silver pay a dividend? No. Does it pay interest? No. Can you judge silver on the basis of P/E? No.”

For Naren, investing in assets that have already rallied strongly is the wrong approach. “People are fascinated by gold today because gold has done better than equity. But that's exactly when you should be careful,” he said.

He recommends that gold and silver, if at all, should only be part of a multi-asset strategy — not standalone bets. “Gold and silver only make sense within a multi-asset framework,” he said. “That way, you’re not overexposed. Asset allocation becomes automatic, and you avoid overcommitting to any one theme.”

Naren’s broader advice is clear: successful investing isn't arithmetic. “What is the problem with investing? It’s not arithmetic,” he said. “It’s about behaviour — and most people get it wrong when they chase returns after the fact.”