Why do we prefer physical assets over financial assets?
It is believed that immediate past performance is a reason for marked preference of physical assets.
Indians seem to be creating a barbell in their portfolio by investing in “risky" assets such as gold and real estate and “safe" assets such as bank deposits and insurance. On the other hand, ownership of Indians, excluding promoters, in Indian companies (equities and mutual funds or MFs) has steadily declined over the last two decades. Here are some factors that explain why Indians prefer physical assets over financial assets.