Equities reign atop the league table of investment returns
Subscribe to enjoy similar stories. For any individual looking to invest, the challenge is to choose from different alternatives. The element of ‘noise’ is high in almost every avenue of investment, with contemporary developments able to swing the mood of investors and thus of the market at a moment’s notice.
It could be gold today or equity tomorrow. This is where one must be mindful. Annual inflation in India has averaged 5.9% over the past four years starting with the pandemic-year 2020-21 and would be 5.5% over a five-year period till the end of 2024-25 if this year’s reading comes in at 4.5%, as the Reserve Bank of India expects.
As a saver, one would like to get a real return that is positive. The drift lately has been towards capital markets, where returns have tended to be quite attractive. The remarkable exuberance seen since covid has percolated to the market for initial public offerings (IPOs), where the high market prices of newly listed shares have provided their allottees substantial gains in recent times.
The accompanying table shows the returns on various instruments during the first six months of 2024-25. It is assumed that money was invested at the end of March and values in September 2024 have been used to gauge returns, with averages for these months taken for this purpose. Alongside, it shows comparable returns over the last 10 years ending 2023-24 to provide an idea of historical trends, since the returns scenario of six months cannot be assumed to hold in the future.
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