If you have to travel a really long distance, will you take a flight or go on a bicycle? A recent issue of tax-free bonds offering 7.5% received a huge response from investors even though there was a 15-year lock in period. Curiously, the same investors are hesitant to commit funds to equities with a 15-year perspective. While the tax-free bonds will give a mere 7.5% return and take away liquidity, investment in equity can give much higher returns without sacrificing liquidity. Despite efforts by financial planners and the industry, the average Indian investor still does not understand the benefits of equity investing. With a 15-year CAGR (compounded annual growth rate) of 14%, the Nifty 50 would easily top the list of preferred invest…
Read the full article at: http://economictimes.indiatimes.com/wealth/invest/why-investing-in-debt-instruments-wont-help-meet-long-term-goals/articleshow/53784637.cms
