Which is the best long term investment-Real Estate, Gold or Stocks?

February 29, 2016

There is always a raging debate as to which is the best asset class for long term investment for a period of lets say 10, 15 20 years or even more. So which investment is best for long term – gold, stocks or real estate?

Gold Asset Class

While Gold is not a very attractive asset class over a long period, it does find favor with small investors for whom liquidity and ease of selling is paramount. For HNI , both stocks and real estate has been putting them in dilemma of investment choice. Plethora of statistical data are rolled out to justify investment in both type of assets.

Long Term Investment in Real Estate & Stocks

Considering the investment is planned efficiently  in both stock and real estate, in long term, stocks definitely provide better returns but investment in real estate provide extreme sense of financial and social security which has tremendous weight in decision making from long term prospective. So from asset class allocation point of view, the investor must balance investment in both shares and real estate without ignoring each other.

Real Estate Investment also generates income when rented out.
Value alterations for gold are defined by market ups and downs; Property prices always rise with some short term corrections though.

Identifying investment property

When it comes to investment in property from long term perspective, Spacio advises pre-launch and under construction projects because they come  at least 20-30% cheaper than the market value of ready-t0-move in flats in India. Investment in under-construction property, if held for more than 3 years, will also be eligible for long term capital gain benefits as per Income Tax Law in India. But the firm advises not to go solely by the builder’s reputation when selecting upcoming project for investment purpose. Of course good reputation of builder assures that the project will complete and the property buyer will get possession of the place, but there are other parameters to consider like the potential of the location for appreciation, how that property fits in the overall investment portfolio of the client, etc.

As compared to commercial spaces for retail, residential investments are less risky, considered more liquid within a shorter period of time and calls for lower loan interest rates.
Unlike any other real estate market, property prices in Mumbai have gone up 6-8 times or may be more in last 10 years.

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