Friends,
Since 1991 , investment in Sensex has appreciated to roughly about 18 times. It is also very closely correlated with the GDP growth according to Kiran Kabra. The real estate in Mumbai has grown in value by about 4 times and the bank deposits have grown roughly about 5 times since 1991 . Gold prices too has grown by 5 times since than.
In my opinion the Sensex returns are after one has continuously adjusted portfolio to represent Sensex which involved effort and attention as the Sensex composition has been altered many times. The real estate seems to have appreciated by lesser degree but it has given the benefit of occupation and use or some nominal returns by way rent but not without some costs of maintenance and taxes. The investment in Banks’ FDs and gold has been slightly less bothersome to hold.
Supposing we divide the period since 1991 in to up to 2000 and after , the returns from Sensex stocks would be far lesser than the other avenues of investment for the earlier period of nine years and would be astronomical for the period after 2000. This very character of the equity investment makes it not entirely advisable. You have to move in and move out at right times to be able have the real advantage of equity investment or else shun it. Further , you should be engaging services of some experienced consultant to guide you as an ordinary citizen can never find out when to get in out.
The ones who keep their investible funds in all the four pockets will not come to grief ever. Investment through insurance policies will be a good replacement of the need to invest in FDs of Banks and direct equity holding being easier to manage. ULIPs are getting popular for this very purpose besides being giving tax relief and saving costs.
Hari Om
Krishna Kumar Khandelwal
No comments:
Post a Comment