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Mutual funds vs gold vs real estate: Which is better as stock market is at record high?
Real estate is a good investment option when the stock market is high, offering higher returns and flexibility compared to mutual funds and gold
Mutual funds vs gold vs real estate: When the stock market is at a record high, return on equity assets like stocks and mutual funds are limited as they have limited space for upside. Similarly, gold would be in a downtrend due to the high demand for equity assets. In that case, investing in real estate can be a good option if someone has a surplus amount for investing. SEBI registered tax and investment expert Jitendra Solanki said that if someone is looking for a better medium to long-term option, real estate can be a good option. but, there needs some pun in the current scenario when the stock market is at a record high.
“One should look at commercial properties as it yields to the tune of 10 per cent in the medium to long term. but, commercial property investment requires a big surplus amount for investment,” said Solanki.
If someone has a small amount for investment, the REIT would be a better option as it is more easy to liquidate and it gives 12 to 15 per cent annual returns in the long term.
So, a real estate investor is advised to diversify one's realty portfolio by investing some portion of the amount in REIT as well. But, investing in residential property is not advisable, added Solanki.
Real estate has not only been a promising investment but a secure option as well. While mutual funds are also profitable, they tend to block the investment for a fixed time period, and the returns are comparatively lower. “Real estate investments are much more beneficial as the enormous appreciation generates higher returns. Also, the asset is flexible and can be converted into cash as per need. It is a great source of passive income as well, generating a regular inflow of cash as compared to mutual funds,” said Pankaj Bedi, Executive Director, Navraj Infratech.
In addition to being a promising investment, real estate has historically been a stable and safe choice. Mutual funds are also profitable, but they restrict investments for a set period and offer relatively lower returns.
“ However, the large appreciation and better profits make real estate investments more advantageous. Additionally, the asset is adaptable and can be changed into cash when needed. Additionally, it is a remarkable passive income source because, unlike mutual funds, it produces a steady stream of cash. Real estate investments offer potential tax advantages, such as mortgage interest and depreciation deductions, which can bolster overall returns," said Atul Banshal, Director of Finance, Omaxe Ltd.
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First Published:6 Jul 2023, 01:58 PM IST
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