This is with reference to ‘‘Equity returns fail to beat inflation’’ ( Business Line , June 25). The analysis is indeed an eye-opener and should act as a deterrent for investors who chase equity investment as an option for long term and sustainable wealth creation.
In this context, it is important to note that equity as an investment option has always been hyped and projected as an easy route to wealth creation. It is common to find financial planners and advisors encouraging retail investors to go for equity mutual funds for long-term wealth creation. Global experience in recent years has just been contrary to this thought process.
Barring Brazil, no other economy could give the kind of returns Sensex gave from mid-2003 to January 2008.
Equity investment needs to be driven by sensible approach and not by irrational exuberance.
Additionally, investors also need to note that a portfolio needs to be well-diversified across asset classes and not alone in equities. Believing equity to be a panacea for all investment needs can be fatal for wealth creation.