Now as we are in the new financial year, many are plannig their investment in stocks, mutual funds, real estates etc for the current year. Came across the following articles which compare investments in real estate and investments in diversified equity mutual fund.
http://www.advisorkhoj.com/articles...rom-Real-Estate-really-that-high#.UzwduqiSyE4
http://www.moneycontrol.com/news/mf-experts/mutual-funds-or-real-estateis-better_850951.html
From my own experience I bought a flat for investment in 2001 at 6 Lacs ...which is worth Rs 50 Lacs today. But if I had invested the same Rs 6 Lacs in equity mutual funds like HDFC Top 200 fund, then the value of that investment is over Rs 110 Lacs today or more than double and that total amount is taxfree....we need to plan our investments more carefully.
If economy is growing at 8 % pa...real estate grows at 14-15 % CAGR and equity mutual funds will grow at 18-20 % CAGR ( Compounded Annualised Growth Rate ). So if we can make more than 15 % CAGR, we will be ahead in the investments game.
Just sharing some thoughts....
Smart_trade
http://www.advisorkhoj.com/articles...rom-Real-Estate-really-that-high#.UzwduqiSyE4
http://www.moneycontrol.com/news/mf-experts/mutual-funds-or-real-estateis-better_850951.html
From my own experience I bought a flat for investment in 2001 at 6 Lacs ...which is worth Rs 50 Lacs today. But if I had invested the same Rs 6 Lacs in equity mutual funds like HDFC Top 200 fund, then the value of that investment is over Rs 110 Lacs today or more than double and that total amount is taxfree....we need to plan our investments more carefully.
If economy is growing at 8 % pa...real estate grows at 14-15 % CAGR and equity mutual funds will grow at 18-20 % CAGR ( Compounded Annualised Growth Rate ). So if we can make more than 15 % CAGR, we will be ahead in the investments game.
Just sharing some thoughts....
Smart_trade
Stocks is all about growth. Real estate is all about location.
Some stocks grow 10%, some 25% and some go to zero.
Real estate at some location grow 10%, some 18% and some actually are loss making.
But if you look at the indices, then yes - Stocks beat everything if you invest when they are undervalued.
Its no true if you invest during times of bubbles. Nikkei, for example, has given 0% returns in the past 30 years.