Few days back there was a news report that "investment in gold" is no more worthy or lucrative? I was slightly shocked and read further only to be pushed into a deluge of market statistics and the vision of some of the pundits who predicted that it would be better to invest even in stocks and shares rather than gold.
On a deeper thinking and dwelling more on the subject, I realized that there are many facets to this argument. One needs to understand as to what is meant by 'Investment' which is being freely defined by everyone, as it suits them. Exactly, that is the point. The definition and term of the word 'investment' varies with every individual or more simply the 'investor' as per his likes, capacity and expectations. It would be unwise to simply follow the arm chair pundits' advice without analyzing as to how close your and his definitions of the word are.
For instance, a youth just stepping into the earning bracket would love to burn some money just for the heck of it - here, he/she may be willing to even lose in trying to understand 'Investment'. A middle aged, deeply into the family may like to make an 'investment' for using the returns towards his son's education or daughter's marriage down the years. One with some grown up children may be setting his eyes on a return post his retirement which is round the corner!
When I wanted to buy a single bedroom flat in 1985 in a particular area of Chennai, people who 'knew' things advised me against it as my purchase price of Rs 275 per sq feet was way above the then rate of Rs 200/- and that the builder was trying to take me for a ride. Similar advise poured in when i went for a 3000/- per sq ft flat in 2004 and both times, fortunately , the pundits were proved wrong. The 275/- per sq ft was sold at Rs 1500/- per sq ft 20 years later, ! The 3000 per sq ft purchase turned to be a tip of the iceberg in that had I left that deal I would have rued the decision for ever, as it soon climbed astronomically and now it is somewhere around 15000/- per sq feet - in a span of a decade. Leave alone the profit part of it, now it is not even within the purchasable limit - how can a monthly earner buy an apartment for Rs 1.5 crores !!!
When my friend was about to buy a plot of land in 1990 for a lakh, people looked down upon him. Egged on by our experiences , he went ahead and built a house there in 1998 which is now being asked for a price of over a crore.
In my own experience, I could use the bullion bought at prices varying from Rs 600/ per gram in early 1990s for my daughter's wedding when the prevailing rate hovered around 3000 per gram.
What does these imply? Am I being or have I been wiser ???
No, the issue I am trying to underline is one must go by the need of the day or in the years to come. In my opinion, these vary from person to person and so no accurate economic prophesies could be closer enough for you to dip your hand into that proverbial pot of gold. Its worthwhile to define your own economic policies based on your need, your capacity and your strength to hold on to your investment.
In the light of the above experiences, I am of the considered opinion that generic market predictions and investment guidance are of no use unless tailored to your requirements and capabilities. With such a clear view in mind, one should be able to analyze and enjoy the predictions of these soothsayers but be weary of investing and indulging based on such irrelevant advises. I only pity those who still believe could make millions in short time and risk even their retirement benefits into those high sounding 'mid-cap" and 'blue chip' investments and pray for them, neigh, their family.
I firmly believe that we have an economist in us and let us pay heed to that inner voice rather than for things written for ratings and other market inducing values.
Are we being served or mislead?
On a deeper thinking and dwelling more on the subject, I realized that there are many facets to this argument. One needs to understand as to what is meant by 'Investment' which is being freely defined by everyone, as it suits them. Exactly, that is the point. The definition and term of the word 'investment' varies with every individual or more simply the 'investor' as per his likes, capacity and expectations. It would be unwise to simply follow the arm chair pundits' advice without analyzing as to how close your and his definitions of the word are.
For instance, a youth just stepping into the earning bracket would love to burn some money just for the heck of it - here, he/she may be willing to even lose in trying to understand 'Investment'. A middle aged, deeply into the family may like to make an 'investment' for using the returns towards his son's education or daughter's marriage down the years. One with some grown up children may be setting his eyes on a return post his retirement which is round the corner!
When I wanted to buy a single bedroom flat in 1985 in a particular area of Chennai, people who 'knew' things advised me against it as my purchase price of Rs 275 per sq feet was way above the then rate of Rs 200/- and that the builder was trying to take me for a ride. Similar advise poured in when i went for a 3000/- per sq ft flat in 2004 and both times, fortunately , the pundits were proved wrong. The 275/- per sq ft was sold at Rs 1500/- per sq ft 20 years later, ! The 3000 per sq ft purchase turned to be a tip of the iceberg in that had I left that deal I would have rued the decision for ever, as it soon climbed astronomically and now it is somewhere around 15000/- per sq feet - in a span of a decade. Leave alone the profit part of it, now it is not even within the purchasable limit - how can a monthly earner buy an apartment for Rs 1.5 crores !!!
When my friend was about to buy a plot of land in 1990 for a lakh, people looked down upon him. Egged on by our experiences , he went ahead and built a house there in 1998 which is now being asked for a price of over a crore.
In my own experience, I could use the bullion bought at prices varying from Rs 600/ per gram in early 1990s for my daughter's wedding when the prevailing rate hovered around 3000 per gram.
What does these imply? Am I being or have I been wiser ???
No, the issue I am trying to underline is one must go by the need of the day or in the years to come. In my opinion, these vary from person to person and so no accurate economic prophesies could be closer enough for you to dip your hand into that proverbial pot of gold. Its worthwhile to define your own economic policies based on your need, your capacity and your strength to hold on to your investment.
In the light of the above experiences, I am of the considered opinion that generic market predictions and investment guidance are of no use unless tailored to your requirements and capabilities. With such a clear view in mind, one should be able to analyze and enjoy the predictions of these soothsayers but be weary of investing and indulging based on such irrelevant advises. I only pity those who still believe could make millions in short time and risk even their retirement benefits into those high sounding 'mid-cap" and 'blue chip' investments and pray for them, neigh, their family.
I firmly believe that we have an economist in us and let us pay heed to that inner voice rather than for things written for ratings and other market inducing values.
Are we being served or mislead?
Well said sir. I especially liked the last paragraph. That should be reality. Your investment should purely depend on your circumstances, situation and most importantly your own self view/thoughts being served that particular time rather than the ratings around.
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