Over 20 Year Period : FDs Beat Equity Investment

Don't listen to people who tell you that stocks are the best thing ever. If you were 50 in 1991 & you put your money into stocks, you made less money with stocks than by putting money in long term bonds.

One have some that have yielded 16% since 1997. In fact the market, in
September 2001 was just about  49% higher than September 1991, a compounded return that would give you less than a SB (Savings Bank) account deposit (Not accounting for dividends or tax of
course)

5.9% per year..!
Even the past five years have seen a problem. From 2007 to now (2012) the total market return is a miserable 5.9% per year.

Nearly all of the growth in Indias markets were between 2003 & end 2007.

If you remove this period from the market, the rest has given substandard returns. Of course individual stocks have given great returns. But if you werent part of the great part of the story, you probably do not like the markets too much.

Bank FDs have beaten equities over 20 years. Of course some of it may be cherry picking, and we can refute that forever, but there is really no reason to think that FDs cant beat stocks n the long term. After all, an FD at 8% in 2007 would have beaten stocks to date, and 5
years is long-term in most investors books. Startling but true

Source: http://capitalmind.in/   

Share: