Where should an investor invest today?

Equity markets? Real estate or Gold? – I am assuming that investors look only at these 3 asset classes – I do not know how to invest in horses, oil, other commodities etc. so I will stick to these 3 asset classes…

Let us start with Equities. If some kid had come to me in 2007, I would have said:

a. Do a sip in a good fund: and the kid would have got returns less than PPF or thereabouts. Maybe a little more if he had invested in a good mid cap fund. Not exactly sure if he would have got a far greater return.

b. If he had insisted on direct equity, I would have said ‘Fine pick up a nice large cap stock and hold for 4-5 years’. If he had picked up Reliance Industries, Tata Steel, Hindalco – I could not have faulted him. He would have lost a  ton.

That brings us to say Real Estate: Yesterday I spoke to a financial adviser who deals with officers of the G O India. He told me that 25-30% of real estate has money from corruption proceeds. Most of these ‘investors’ are ONLY looking at money being safe…NONE, none, none of them are bothered whether they get a 25% p.a. return or whether they get 2.5%p.a. They just want BIG blocks of money to be deployed in one place and with just one piece of paper. When YOU borrow money at 10% interest bearing loans to buy such hyped assets, all the best, chances are you will be alone…..

That brings us to gold! Well, well, the reason why people think gold will continue to go up PERMANENTLY is because over the past few years it has given a good return.

Real estate, gold, equities all make money for the investor. However Deepak Parekh, Uday Kotak, Hemendra Kothari are proof that it is your brain that makes money, not the asset class.