Shying away from Equity? Can you really afford it?

How many of you are actually ploughing jobs and aspiring of doing a business??

How many of you are in a business and thinking of expanding your business or acquiring another business??

How many of you are investing with a goal of retiring sooner??

How many of you can claim that their investments are beating India’s annual average inflation (CPI) this year?

If you answered even one of the above questions with a Yes, you really cannot afford to shy away from equities. I sometimes wonder how and why are equities perceived as so dangerous or so risky an investment?

Can anyone tell me 1 person among India’s 500 richest or America’s 500 richest man/woman who is not an equity investor/holder?

Gold and Fixed deposit and PPF rule Indian mindsets don’t they? After a conversation with a friend of mine I went ahead and found the following stats and compiled in an excel sheet for you to easily comprehend.

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The facts are for all to see. From 31st March 1981 to 31st March 2013 the average yearly returns are as under :

Gold has given an annual return of 9.08%

Silver has given an annual return of 9.43%

NRI FD has given an annual return of 8.84%

PPF has given an annual return of 9.68%

BSE Sensex has given annual return of 15.27%

Inflation during this period has been 6.92%

The writing is clearly on the wall over the past 30 years. Real estate does not have an index so the comparison is tough, plus involves a lot of black money and a huge bulk of an investment, there also is liquidity problem as far as real estate is concerned.

What is even more interesting to note is that most of the Marquee schemes of leading Mutual fund have beaten the BSE sensex hands down, which means even higher returns. Add to that the Govt of India does not charge any tax on income made on equity if the investment is atleast 365 days old!!!! Today investing in mutual funds is as easy as it can get.

The myth that equity is bad, risky, complex is what is keeping a large number of general public away from making their money work as hard as they are! It is about time people started looking at equity as a way of life. I myself have realized this late and the hard way, however, I intend to make it up 😀

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