Real estate and equity are two of the biggest investment vehicles to plan one’s retirement. I have been investing via SIPs in mutual funds for the past 4-5 years. But I have seen that real estate has performed better than the stock markets in recent years. I want to know that for an investment horizon of another 10 years, should I continue investing in equities or move to real estate?
-Navin
Whenever we talk about realty, we have to look at the amount you are investing and the kind of risk exposure you're taking. Investors derive comfort from realty investments because they don’t look at the price fluctuations on a daily basis. Since you can view the price of your equity investments daily, your belief in it gets reduced. However, equity mutual funds are a good way of building wealth from small amounts. Your experience of the past 5 years might not seem rewarding, but if you have the timeframe of 15-20 years, we don’t think you will be disappointed with equity returns. We believe that you should invest regularly in well-performing mutual funds for the long-term, which will give you the best chance of building wealth.
This article was originally published on February 16, 2012.
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