[Imagesource : eurobankequities.gr]
“Necessity is the
mother of invention” but in money terms “Equity is the mother of wealth
creation”. Truly nothing can beat the way equities had delivered over the
years.
Many would have heard
that our parents had grown financially by creating Recurring Deposits. Just as
they say that Change is inevitable, those RD’s too had to be changed. The
falling interest rates which were once around 15 had consistently dropped below
9. So RD’s were a yesteryear icon for many Indian’s like RD Burman and the
evergreen star has always been Equities.
The FD, RD, KVC,
corporate FD’s were all safer but the returns are taxable based on the tax slab
of the person, which makes them unattractive. Further even without tax the return
of around 9% is lesser considering inflation around 6 to 8% for the last 5
years are so. Therefore after the maturity you will be richer by a mere 2 or 3
%.Even over the long term say around 15 years or more the return from these
deposits will not be sufficient for retirement or for child education etc.
Gold does not lose its
shine any time but considering the history of returns it has delivered; it is
around 8 to 9%, which is lesser than the best performing mutual funds or stocks
in the market and with the fear of theft. Real estate is a physical asset, but
there is higher transaction cost and fear of intrusion is always there.
Equities had always
delivered consistently more than all the asset classes and over the long term
this is the best bet. Returns had delivered more than 13% in the broader index.
Enjoy the current Bull
Run and stay invested to reach pinnacles, who doesn’t wishes to see their money
growing, it’s Your Money…Keep growing
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