Many people ask me whether they should invest money in stocks or mutual fund or not? I say, you should invest at least some part of your money into equities because it is the only investment which can beat inflation in the long term. It's not that investing in equities will guarantee superb returns because there are periods and even extending up to 5, 10, 15, 20 and even 25 years where equities have delivered negative, no returns or very poor returns. For examples in Japan, Equities has not really been the best performing asset class in last twenty years. Nikki, index of Tokyo stock exchange was around 39K on December 1989 and where it is now, around 15K, after touching lows like 7K and 8K during 2001 and 2009. What this mean, if you have invested in Index you would have one-third of your money by now, forget about getting any interest.
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Recently one of my readers asked me that he wants to invest some money on NRE fixed deposits but confused on whether to go for foreign banks like Citibank, DBS, Standard Chartered, Deutsche Bank or Indian banks like ICICI, Kotak, HDFC, SBI, Axis Bank or Union Bank? I asked him, whether he has any existing NRE saving account , he says he doesn't have any existing NRE saving account? Then I ask him what is more important for you? the interest rate or convenience? and his answer was the interest rate. Read more »
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