Today I wish to discuss if Equity is better Investment than Real Estate. I always believe, Finance, Money and Investments are integral part of the life of each and every person. But still many individuals ignore it. Managing money is actually more important that earning money. There are too many examples of people earning huge amount of money, but still not so rich. Well, Investments are integral part of Managing Finance and Equity is inevitable Investment. So let’s discuss in detail about Investments. I have discussed in detail how to balance percentages of total debt and equities of total Investments, in my article, Balancing Equities and Debt.
But everyone must be curious, which is the highest return giving, Investment. Is it, Fixed Deposits, Government Securities, Gold, Silver, Stock Market, or what. Most of us believe that Real Estate is highest return giving Investments. In fact many of us believe that Investment in Real Estate always gives big returns. Interestingly so many people do investments in Real Estate. But,still biggest chunk of Investors ignore one very important thing and i.e. Equity. Yes, it is high risk high return Investment. Stock Market! But so many people share their experience how they lost the money in stock market, and how, wise investor should be away from it. Yes equities can be bad bet if you enter into it without proper study, analysis, observation and knowledge. And it is altogether the independent area of discussion and study.
So now the question arises, if equity investment is so complicated, then how common man should invest in the same. And the answer is very simple and i.e. Mutual Funds. You need not study, analyse or even you need not have deep knowledge of Stock Market and still you can access Stock Market . Yes through Equity Oriented Mutual Funds. These Mutual Funds simply invest in Equities for you. Please check my article 10 Reasons to Invest in Mutual Funds.
Investing in equities through Equity oriented mutual funds, has proved to be extremely successful. If you simply check the returns given by Equity oriented mutual funds in last 10 years, you will be surprised by the huge returns given by so many Mutual Funds and they have very well beat Real Estate Investments. Most of the equity oriented mutual funds have given the annualized returns of 17% to 20% for consecutive 10 years. Can you imagine what does annual return of 20% for 10 years continuously mean. It is more than 400% absolute return!!! That too without any hassle and with extreme liquidity!!! This is not at all possible in Real Estate which has lot of complications and taxes involved in purchase and sell.
Friends, thanks for your valuable time for reading this article, and I believe it changes your perspective about Equity Investments, and if it is so you prefer to share it with your dear ones!