1. If gold, like other assets, has to be acknowledged as an investment for wealth creation during our own lifetime, its long-term returns cannot be ignored for comparison.
2. Hence sharing a published comparative 37-year CAGR data from 1st Apr'80 - 31st Mar'18 along with lowest / highest / latest YoY changes:-
a) CPI inflation - 7.04% CAGR
lowest:3.54% ('05-'06)
highest:12.5% ('10-'11)
latest:4.71% ('17-'18)
b) Silver per kg - 7.88% CAGR
lowest:(-)32% ('92-'93)
highest:107% ('10-'11)
latest:(-)9% ('17-'18)
c) Gold per 10g - 8.46% CAGR
lowest:(-)14% ('97-'98)
highest:37% ('05-'06)
latest:7% ('17-'18)
d) Fixed Deposit - 9.11% CAGR
lowest:5.25% ('03-'04)
highest:12% ('05-'06)
latest:7% ('17-'18)
e) PPF - 9.64% CAGR
lowest:7.3% ('10-'11)
highest:12% ('86-'00)
latest:7.8% ('17-'18)avg
f) BSE Sensex - 16.49% CAGR
lowest:(-)47% ('92-'93)
highest:267% ('91-'92)
latest:11% ('17-'18)
3. Sensex has, therefore, enabled inflation-adjusted wealth creation, in addition to matching returns of other assets, over the past 37 years!
4. For mutual funds launched in 1993, for which data is available, 25-yr CAGR returns from their launch till 31st Mar'18 are :-
a) Balanced - 11%
b) Large&Midcap - 12%
c) Multicap - 15%
d) ELSS - 15%
e) Midcap - 20%
f) Largecap - 21%
5. While reliable and published real estate data are not readily available for the long-term, its returns would be only 9.7% CAGR even if it has gained 100 times in last 50 years, or 30 times in last 37 years, or 10 times in the last 25 years.
6. If so, then too this was only possible under the historical development model which had allowed 5 sources of gains in the owner's hand through lenient laws and rules, viz. a) change in land usage, b) physical infra development, c) area's commercial viability, d) unilateral booms, and e) impact of inflation, all of which can't be gained by any single person now, with introduction of updated ready reckoner rates, emergence of real estate developers, "disruptive" initiatives like demonetization, GST and Benami Act, with RERA and stricter rules for compliance in place too.
2. Hence sharing a published comparative 37-year CAGR data from 1st Apr'80 - 31st Mar'18 along with lowest / highest / latest YoY changes:-
a) CPI inflation - 7.04% CAGR
lowest:3.54% ('05-'06)
highest:12.5% ('10-'11)
latest:4.71% ('17-'18)
b) Silver per kg - 7.88% CAGR
lowest:(-)32% ('92-'93)
highest:107% ('10-'11)
latest:(-)9% ('17-'18)
c) Gold per 10g - 8.46% CAGR
lowest:(-)14% ('97-'98)
highest:37% ('05-'06)
latest:7% ('17-'18)
d) Fixed Deposit - 9.11% CAGR
lowest:5.25% ('03-'04)
highest:12% ('05-'06)
latest:7% ('17-'18)
e) PPF - 9.64% CAGR
lowest:7.3% ('10-'11)
highest:12% ('86-'00)
latest:7.8% ('17-'18)avg
f) BSE Sensex - 16.49% CAGR
lowest:(-)47% ('92-'93)
highest:267% ('91-'92)
latest:11% ('17-'18)
3. Sensex has, therefore, enabled inflation-adjusted wealth creation, in addition to matching returns of other assets, over the past 37 years!
4. For mutual funds launched in 1993, for which data is available, 25-yr CAGR returns from their launch till 31st Mar'18 are :-
a) Balanced - 11%
b) Large&Midcap - 12%
c) Multicap - 15%
d) ELSS - 15%
e) Midcap - 20%
f) Largecap - 21%
5. While reliable and published real estate data are not readily available for the long-term, its returns would be only 9.7% CAGR even if it has gained 100 times in last 50 years, or 30 times in last 37 years, or 10 times in the last 25 years.
6. If so, then too this was only possible under the historical development model which had allowed 5 sources of gains in the owner's hand through lenient laws and rules, viz. a) change in land usage, b) physical infra development, c) area's commercial viability, d) unilateral booms, and e) impact of inflation, all of which can't be gained by any single person now, with introduction of updated ready reckoner rates, emergence of real estate developers, "disruptive" initiatives like demonetization, GST and Benami Act, with RERA and stricter rules for compliance in place too.