There can be many different ways to invest our hard-earned money. People generally tend to invest in an asset class such as gold, Bank FDs or Real Estate believing that they are the safest and most profitable in the list of all investments. If we look at the latest data, we will find that mutual funds are yielding far better returns than other asset classes.
These are few advantages of investing in mutual funds.
Now we’ll be understanding the returns that mutual funds and other asset class investment generate over the period of time.
The above graph very clearly shows the growth rate of a mutual fund, Fixed Deposit Real Estate and Gold for 5,10,15 and 20 years and very fairly we can conclude that only Mutual Funds generates the inflation-beating returns and grow your corpus.
People in India have this belief that owning a property is the best investment we could ever make. In the past few years, the real estate market has been very volatile and has made some big investors incur great losses.
Moreover, most of the mutual fund schemes are highly liquid and you can exit at any point in time. Investment in real estate is comparably illiquid. Sometimes, real estate might give higher returns but it blocks the money for a very long period.
Study shows that the growth from the year 1913 to 1931 in gold rate was flat and although in 2018 the gold price has increased radically, yet it is not able to beat inflation.
Fixed Deposit being a traditional investment product could never give you more than 8% return. Returns from FD are taxable.
To conclude, the wise decision is to invest your money in Mutual Funds. Get rid of the old tradition to invest in FDs, gold or property. Mutual funds have a wide array of schemes to suit your risk appetite and investment profile. Go for it!