| POST TAX RETURNS (CAGR) OF ASSET CLASSES | ||||
| 5- YEAR | 10- YEAR | 15- YEAR | 20- YEAR | |
| EQUITY | 11.0 | 17.0 | 13.6 | 12.0 |
| GOLD | 9.0 | 12.9 | 11.0 | 8.4 |
| BANK FD | 5.7 | 5.2 | 5.1 | 5.5 |
| PROPERTY | 8.0 | 13.4 | 10.8 | 6.2 |
| CAGR IN WPI | 6.2 | 5.9 | 5.7 | 5.5 |
| AVG INFLATION | 7.4 | 6.3 | 5.9 | 5.7 |
| (FIG IN %) | ||||
The above is from a MORGAN STANLEY report that is more than a year old (report must be of 2015, this article was published in sept 2016). There are several lessons or takeaways for us:
- Equities are the best weapons to fight inflation and bank deposits are the worst;
- Property is good, provided we are lucky with our choice. The above return is an ‘average’;
- Gold is neither as good as it is touted to be nor as bad as it seems.
- A return that measures the ‘average’ of a group or a set of products hides the real story.
