'Look beyond traditional investment route to create wealth'

Without hurting the sentiment or making the audience - a mixed gathering of young and old alike - feel awkward about their current savings habit, N Venkatesh, Cluster Head (Rest of Tamil Nadu), ICICI Prudential Asset Management Company Ltd,urged the participants to gauge if their investments beat inflation and gave better returns...

"It is not wrong to take the traditional route by investing in fixed deposit, property or gold, but have such investments helped fetch enough returns to beat inflation?" he asked gently before stating categorically that "the only asset class where one need to pay no tax on long-term capital gains is equity."

“Not many are aware of this” Venkatesh continued addressing an investor education camp at Hotel Vivanta by Taj in Coimbatore. The meeting was organised jointly by BusinessLine and ICICI Prudential Mutual Fund.

"Making money is not everything. You need to create wealth and this has no shortcut; it is a process that one would have to understand. While opportunities are aplenty for creation of wealth, look beyond the traditional mode and start investing now for we only have 30 years of effective physical life to ensure that we take the right decision," he said.

Admitting further that savings is required for the short-term, he said "but that (savings) alone will not be enough to create wealth."

"Invest in equity from a long-term perspective and after proper understanding for better results," he said, highlighting some simple rules such as starting early, staying long, understanding the dark spots in investment vehicle (such as capital gains tax) and bringing down the physical assets and increasing equity exposure.

While on the subject of investment in equity, Venkatesh also cautioned the listeners about getting emotionally attached to equity markets. "Sentiments play a vital role affecting our markets, but markets have given phenomenal returns eventually.

"And equity alone is not just an option for creation of wealth. Look at mutual fund; go on an asset allocation binge for the current market trends are favourable for investment in equity," he said, before calling upon the listeners to "try and hug the markets - when it is still low''.

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