Features of Asset Classes
- Volatile in Short Term
- Wealth Creation in Long Term
- Returns more than Inflation.
- Tax Efficient
- High Liquidity
- Divisibility
- Can start investing with small amount.
- For regular Income (Interest Taxable & LTCG/ STCG)
- Stability
- Predictability of returns
- Credit Risk
- Interest Rate Risk (Rise in Interest rates, Reduction in market value of
securities) - Liquidity Risk
- Re-Investment Risk
- Counterparty Risk
- Stable in Volatile/ Uncertain Economic Environment
- Volatile in Short Term
- Store of Value in Long Term
- Returns nearby or lower than Inflation.
- Tax Inefficient (LTCG @20% after indexation after 3 years) – Subject to
GST & Cess - High Liquidity
- Divisibility
- Can start investing with small amount.
- Physical Gold is subject to purity standards.
- Risk of Impurity
- Risk of theft
- Charges such as Locker Rent for storage & safety of physical.
- Jewelry making charges and GST on it is a drag on Returns from investment in jewelry.
- Tangible Investment: Real estate in India involves buying physical properties like homes or land.
- Lont-term Value: It typically appreciates in value over time, making it a good investment.
- Rental Income: You can earn money by renting out your property to tenants.
- Diverse Options: India offers various types of real estate, from residential to commercial properties.
- Maintenance Cost: Owning real estate comes with ongoing expenses for up keep.
- Regulatory Changes: Government policies can impact property prices and ownership rules.
- Wealth Diversification
- Tax Implications: Property ownership involves tax obligations, such as property tax and capital gains tax.
- Illiquid – Very small window to redeem periodically after lock-in
- Very Long-Term Commitment
- High ticket size – suitable for HNI/ UHNI portfolios
- Tax Inefficient
- Low Correlation with other Asset Classes – Benefit of Diversification
- Unlisted
- Illiquid Very Long-Term Commitment – Popular amongst HNI & UHNIs
- Small, Medium and High-ticket size
- Tax Inefficient
- Low Correlation with other Asset Classes – Benefit of Diversification
- Unlisted
- Art Index is launched by IIM Ahmedabad in Nov 22.
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