Here are a few top reasons why equities should be your investment of choice:
- One of the best avenues to fight inflation
What is worth Rs.1000 today will be worth only Rs. 500 after 10 years. This is because inflation drives up the cost of living and eats away the value of your savings. Traditional investment avenues like Fixed Deposits, Bonds, etc. have a limited upside of 8 to 10 %, whereas equities as an asset class have given an average annual return of about 13 %. Hence, when it comes to beating inflation, equities are undoubtedly your best bet.
- Source of Long term wealth creation
The longer you stay invested, the higher the returns. Investing in good businesses and growth stories at an early stage provides unlimited upside potential. For example, your investment of Rs. 1,000 in the Infosys IPO in 1993 would have fetched you Rs. 30 Lakhs today. Not participating in growth stories would certainly be an opportunity missed.
- One of the most Liquid investment options
Equities also provide you the flexibility of quickly changing your holding patterns to suit your requirements and also convert your holdings into cash instantly. This makes it the most suitable option compared to other asset classes for investors who are looking for liquidity.