Morgan Stanley has compared different asset classes’ returns for different time frames for India. Equities are taken as general Sensex and Nifty Index based levels for comparison.
| 5 year | 10 year | 15 year | 20 year | |
| Equities | 11 | 17 | 13.6 | 12.9 |
| Gold | 9 | 12.9 | 11 | 8.4 |
| Bank FD | 5.7 | 5.2 | 5.1 | 5.5 |
| Property | 8 | 13.4 | 10.8 | 6.2 |
| Avg. Inflation | 7.4 | 6.3 | 6 | 5.7 |
Key Advantages of Equities over other Asset Classes:
- Diversification of portfolio mitigates the risk
- High liquidity: in 2-3 days of settlement you get your money back in your a/c
- Multi bagger returns possible if stock selection is right
- Long term capital gain tax advantage
- You get a chance to be a part of (shareholders) large professionally managed companies and enjoy be a part of them rather than just consuming their products or services.
IF you are just satisfied by watching Asset classes’ comparison and advantages the real picture is ahead for you, here are few multibagger stories for you
- The big bull Rakesh Jhunjhunwala has a portfolio of more than INR 13,000 Cr which he gathered in last 30 years.
- Some of the latest multibagger examples are as follows:
| Performance of few multibaggers in last 10 years | ||
| Stock | Return (%) | Rs. 1 lac invested now stands at Rs. Cr |
| Symphony | 91744.1 | 9.18 |
| Relaxo Footwear | 13664.86 | 1.37 |
| Ajanta Pharma | 12948.55 | 1.3 |
| DFM Foods | 12570.49 | 1.26 |
| Caplin Point Lab | 11540 | 1.16 |
| Vinati Agro | 10735.22 | 1.08 |
| Mayur Uniquoter | 8722.22 | 0.88 |
| Eicher Motors | 5761.27 | 0.58 |
| La Opala RG | 5298.4 | 0.54 |
| Kwality Ltd | 5127.46 | 0.52 |
Hence to retire as a rich, Equities are the option for you.
Right stock selection is also equally important for wealth generation otherwise you also can end up getting average returns of Index or Mutual Funds. And in extreme case can even suffer losses by blindly following any stock tips.
If you want to think beyond just common returns of Mutual funds, we are here to help you out to achieve your goal. We do not typically advertise for 20-25% or more type of returns else we work with clients for few years and make 2-3x kind of returns for their portfolios.