Investment decisions are one of the most critical life decisions we make. Achieving a well-diversified portfolio can be quite challenging.
If one were to analyse data from the past 15 years, it would emerge that Equity, which is often perceived to be the riskiest asset class, has earned the highest returns, beating Gold, Real Estate, and Fixed Deposits. Here are a few observations:
- If your investment horizon is a year or less, then Fixed deposits are a good option. Gold, Real Estate, and Equity are long term instruments where you may have to hold your investment for a longer period of time to optimize returns.
- It is worth revisiting the old debate about whether to buy or rent a house, and whether property is an asset or a liability. Let’s see if the 15 year return table can enlighten us!
- Equity – high on risk and returns, tops the league table as expected.
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