Where can You Get Good Returns on Investment in India?

Today, investors in India have a number of options to choose from. You can invest in mutual funds, real-estate, direct equities, gold, PPF, etc. There are a number of assets which can provide good returns, however, it is ideal to be aware of both the advantages and disadvantages of investing in different asset classes, be it equities, real estate, gold, etc. The question ‘where to invest one’s money’ has become one of the most crucial for investors.

To make it simple, we can work a fitness analogy. If your goal is to be fit, you would choose some activity which involves you being active. You can choose anything like running, weight training, sports, etc. If you choose sports, then you can either go for sports like badminton, squash, tennis, basketball, etc. People who play sports are usually very fit and full of life. They have a thing in common, which is that their success comes not from finding the best, but from doing the best. Similarly, if physical fitness is a goal then Chess & Bridge which are sedentary games would not be effective choices. Similarly, if “Wealth Creation” is your aim, then “Debt” instruments will not be the right choice.

You can find success in choosing an asset class for the “Right” reasons and then “Diligent” execution of your strategy. It is important to choose the right tool to invest in Real Estate, rather than investing poorly in Capital Markets or Mutual Funds without adequate research. Real estate has always been a tried and tested method of wealth creation. There have been both success stories of investors in, capital market and real estate, as well as failures. It is important to understand why some people did not get desired results from Investments.

Investor’s who invest in the latest “Hot” sector, have historically known to get “Cold” returns. This is due to a bubble that is created when everyone finds the same “Asset” class or sector attractive and pumps in money only for this reason. The returns on investments which are touted as the next big thing, or which will have guaranteed returns are usually the ones that fail to give adequate returns.  

Investors like Mr. Buffett and Mr. Munger who have generated returns compounded slightly over 18% over their 53 years of history are supposed to be the best. Anyone who promises returns over and above 15% compounded over a long-term period is essentially lying. Ideally, an asset class which can provide a compounded return of 12-15% is considered excellent and will make you very rich. So it’s ideal to do your due diligence or find a professional who is capable and educated who can help you find the right investment option suited to your requirements. The key is to remain committed and stay for the long haul, instead of chasing after the next big thing!