panch-tattva talk…gold v/s equities

Friends,

The gold has become far more dearer then expected but also not for reasons unknown. It is ruling at almost four times the price it commanded in 2000. By the way the Nifty is at 5 times its value then. The question in minds of people is whether to go for gold preferably or to be with equity as an invetsment that would take care of the inflation related erosion.

The answer is very simple, the gold was preferable only so long as the depth of the crisis was not known and fluidity was making us dizzy and incapable of perceiving things in a rational way. Since the time the turmoil is no more there and calming measures have been successful. The Lehman’s faileure an year back becomes history and the resurgent economies all calling for reposition of faith.

In the light of scenario explained above we may go for equity investment in an all out way and shun gold as an investment option because afterall the gold is passive while the what you invest in equities keep working hard for you for producing goods and services including gold itself. So the money put to productive work will always generate for you better, higher and uncapped returns while the returns on gold investment are only when there is continuous money supply and continued financial disorder. The returns by way interest are bad for the reason of it not being an absolutely non-risk investment (leaving aside the G-Sec) and secondly it being absolutely exposed to erosion due to inflation. What is more is the fact that the bad debts happen too fast and too often in times of contracting money supply and high interest regime. So in case of debt you simply can’t have best of both worlds and remain in risk too. Investment G-Sec and Gilt-Edged Securities offer the poorest rate of interest in any case.

I think I have explained you some basics about the matter but please keep in mind that equity investment today calls for periodic profit booking and part conversion in to cash at certain times. You have to have solid advice for such maneuvering and the advice under ‘panch-tattva’ just does that for you. Why not send details of your portfolio and obtain advice about reshuffling.

HariOm,
krsnaKhandelwal

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