Real returns for both asset classes are similar, but real estate has the added benefit of security and long-term wealth creation
Buying something of value on a festive occasion comes naturally to Indians, and gold has long been the first choice of festive shoppers. However, many investment-savvy Indians today are questioning traditional practices and opting for assets that are better aligned with their current budget and long-term wealth-building goals.
Consider the business professional
While real returns on gold and real estate have lagged behind the current inflation rate of 6%, asset management experts believe that real estate offers more liquidity in terms of rental yields in addition to capital value appreciation, whereas gold only offers the latter . Therefore, for thousands of homeowners, especially first-time investors, liquidating their gold investments is a stepping stone to the down payment of their dream home.
Mihir Personal Finance Advisor
For those who want to go the equity route, Parekh advises, “Although they don’t score high on the auspicious quotient, gold exchange-traded funds (ETFs) are also recommended for those who wish to benefit from real returns on gold as a commodity. . Unlike physical gold like ornaments and coins, ETFs do not need to be stored in bank lockers due to the threat of theft. However, unlike investing in real estate through a home loan, there is no tax advantage to buying gold. In fact, ornaments attract GST in addition to generating fees. »
With interest rates on mortgages at historically low levels and numerous advantages for first-time buyers such as the preferential stamp duty and the PMAY, the total cost of acquiring a home has fallen considerably over the of recent years.
For those not yet ready to take the leap into real estate, Krishnan says, “A healthy investment portfolio should contain a mix of debt assets like fixed bank deposits, gold, stocks and gold. ‘immovable. The percentage allocation and additional diversification within each asset class depends on each investor’s risk appetite and financial goals. Therefore, one can take small steps towards his expensive real estate investment by investing in a disciplined way in growth-oriented mutual funds over a period of 5 to 7 years.
Source – Times Property