ash7979

This weekends I have done some investment in one of the leading infrastructure MF, on this MF's Brochure,I have read some interesting figure's (L &T's Share price grew by 71.5%p.a..compounded return similarily Bharti Airtel has aprreciated by 66.8% p.a.,compounded return & a midcap stock Jyoti structures ltd.'s retrun was even better 81.5% p.a. compounded returns, these figures are for last 6 year period) after reading those I started thinking that what is the best investment these days Stocks or RE


I know many ppls will say that its the chance that you have picked right stock at right time or its difficulty to choose & study stocks, so I think comparision of MF with RE would be better then specific stocks.


So, I think its fair if I compare 5 MF's last 5 year's return with RE returns....

Here is the last 5 year's retrun for 5 MF scheme's (Which I like & following since quite a time now) of 5 entirely differrnt MF AMCs (source: valueresearchonline.com) ...

*All the returns are annually Compounded.


1.Sundaram BNP Paribas Select Midcap Reg-G
5-Year 32.76




2.Reliance Diversified Power Sector Retail-G
5-Year 43.50

3.Magnum Taxgain-G

5-Year 36.73

4.ICICI Pru Dynamic-G

5-Year 31.31

5.HDFC Top 200-G
5-Year 29.95

So, here we can take the worst case i.e. 30% CAGR over last five year that makes Rs 100 invested 5 year ago in HDFC Top 200 would be Rs 372 that mean profit of 272% ......

Phew a gain of 272% in 5 years:p !!! I think this can beat RE Gain


Okay, Now see what RE can offer for us.....lets take 2-3 example of RE prices in Pune...I have collected this info form this forum as well as from some other forum (if anybody like to correct it then, he is more then welcome) :

1. In 2004 (5 year back) property rates in Aundh were around 1500-1800...Now these rates are 4500-5500...

2.In 2004 (5 year back) property rate PS was around 800-1000.....Now these rate are 2400-3000...

3.Rates in Baner 5 years back were around 1000 & now its around 2800-3200.....

So, here we can say in last 5 years one's money got tripled in RE..that mean if somebody has put Rs 100 in Pune RE now it will worth around Rs 300, in simple term a flat costing 10 lacs in 5 years back now would cost 30 lacs (that is 3 times the 2004 cost)....

Now do some Simple math:

Rs 100 invested in Pune RE 5 year back would be around Rs 300 Now, that means 200% return (Rs 100 original cost & Rs 200 profit)...Now see what we got from MF...Rs 100 invested in MF 5 year back would be now Rs 372 that means 272% return!!!

So, what you guy say????

What is the good investement???? If you see RE as investment instrument...

Here,I have not counted the the interest cost on the Loan taken for RE (if any) and other hassles (like builder's related issues that I have seen from almost 90% builder at least in Pune)...But in MF we dont have those issue....

So, in short, I conclude that, if we are disiplined in our investement, like we start SIP in MF for the same ammount what we could be paying as EMI for the loan, if we buy property for investemt then I think in long term like more than 5 year, I think no investment can BEAT stocks (MF) investment !!!!


I would like all you guy please comment on this specially realacres, wiseman who I think are most active members on this forum & also I admire their knowledge in RE as well as in general econimics & I also admire their reasoning skils as well...

So, guy I have started ball rolling, lets play on this next couple of days

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Cheers,
-Ashish

drsambu123

No i disagree with u.. First of all do not compare RE with MFs/stocks directly....
May be if u see the 5 year return during bear phase u will get the idea.. So to take the average in the long run.. U cant get 30% cagr for long time.. Anywhere between 15-20% cagr itself great in MF return.. If u need money during bear market its very difficult to sell because of poor return.. U have to wait untill stocks go reasonably well
RE and MF are the great investments
U cant do RE investment for small investments.. However if u carefullly search in the outskirts u can get less value plots/flats..
Do ur asset allocation
Have both RE and MF
Switch little bit whenever required
Dont take 30% CAGR in MF as target/goal

pawarnilesh

Ashish, just simple query on this comes from my innocent mind (I was interest in RE investment as it gives approx 200-300% returns) ... Can I invest Rs. 5000 per month in RE (if yes, then plz elaborate on how and where) and did I get any tax benefit on same?

kingmanish

Good one!!!

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abhishek1980

Hi Ashish

I was initially looking to buy a property on loan but as per the suggestions from senior members on the forum i would probably wait for say around 2 years and build some cash reserve to proceed further. Meanwhile i am very much interested in trying my hand at mutual funds/sip etc.

Lets say with an investment of 5000 rs per month...could u plz suggest me what sip/mf's u should invest in and how much should i break up this 5k into parts ?

Also plz give ur opinion on icici pru life stage wealth ii at a premium of 50k per annum. The policy term is 10 years and something called dynamic p/e funds is what the person has suggested me to link it to. Do u see any gains in this scheme ?

Thnx

Venkytalks

Take a 5L loan

Buy a 5L shop

Pay 5000Rs EMI per month

Get some rent (say 2000Rs or whatever)

Voila: YOu got your 5000Rs per month RE investment.

I strongly recommend this diversification to your portfolio - RE of 30% is needed. So put 5000pm in FD, 5000pm in SIP and 5000pm in a shop

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Venky

mymarji

Wow!! What an Idea sirjee !!

pawarnilesh

Get shop for 5Lacs which will fetch 2K rent

abhishek1980

bhai log.. ab mera kaun banega crorepati ke sawaal ka jawab bhi dedo plz.. so that ye gareeb bhi mutual fund se kuch kama le ..RE ke liye to filhal pocket allow nahi kar rahi..

VickyB

O abhishek bhai tum saharanpur kya gaye tumhara idea hi change ho gaya..now from RE to MF..what about the flat for end use..