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now when u have said to improve learning of @AnyBodyCanFly lets improve it together
will talk about gold first as its the most talked and i beleive hyped investment.
Gold -
Most people think that:
in 1979, price of 10 gm gold was Rs 937/-
today its at Rs 41,650
43x in 40 years
therefore its great investment...
but gold cagr over 40 years period - 9.8%
over the same period inflation -6.3%
so gold real return =9.8%-6.3%=3.5%
during the same period Sensex return= 16.3%
Sensex real return =16.3%-6.3%=10%
"If u took all the gold in the world it would roughly make a cube 67 feet on a side.... it would be worth at todays market prices about $7 trillion(2013)...
for $7 trillion ... you could have all the farmland in US, you could have about 7 EXXON MOBILS and u could have
a trillion dollars of walking around money...
if you offered me the choice between gold and productive assets.... call me Crazy, but i will take the farmland and EXXON MOBILS(productive asset) rather than GOLD(unproductive asset).
Usually, we all look at the price of Gold over 10,20,30 years and look at how much it has appreciated and think what a great investment it is.⁣

There is a problem with our logic. ⁣
Most of the appreciation in the price of Gold comes from Currency depreciation or Inflation. The real return is not much better than a Bank FD rate.⁣
⁣"Warren Buffet has an interesting view Gold"-
⁣He believes that since Gold is an unproductive asset he would not invest in it since it doesn't itself produce anything.⁣

Even the price of Gold is dependent on how afraid people are feeling about their economy. ⁣
credit - varun malhotra
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