Returns of Stock Market, Gold, Real Estate,Fixed Deposit

“Kitna deti hai?”(how much does it give) For a country obsessed with mileage, Maruti advertisement hits the right chords.  If we follow the newspapers/personal financial books/blogs  it is often quoted that equities returns more than 12% while Fixed Deposits give less than 10%. Hence equities should definitely be the part of one’s portfolio for long term infact the formula suggested is 100 – age.  But parents say that Real Estate give the best returns. But last few years Gold has given great returns!  We have tried to find Returns of various Asset Classes in India over a period of time. But we have not taken taxation into picture. A note of caution Torture numbers, and they’ll confess to anything.

Note of caution

As we suggested in our article Comparison of Fixed Deposits and Sensex Returns by changing the reference dates, data can present a different picture. For example if  1992 and May 2012 are used as the reference date for comparison for Sensex:

• The BSE Sensex was quoting at 4,285 nearly 20 years ago. It’s now at 17,404(May 2012), an annualised return of a paltry 7.26%, which is well below the current high inflation rate.
• If the same money had been invested in a 1-year fixed deposit with a commercial bank and rolled over every year, it would have grown to Rs 49,722.
• If investors could have opted for five-year FDs that offered higher rates. This corpus would have been bigger at Rs 70,854.

But, if you had entered the Indian market in 1993 instead of 1992, when Sensex was 2,280, you would have got 11.29% returns. Even a year earlier, in 1991, would have yielded a much higher returns of 13.73%.

Our article  Ups and Downs of Sensex shows how Sensex went up and down and how it has climbed from 100 in 1979 ! Some say that The Great Indian Stock Market Story of the last twenty years is only about four years, 2003-2007. If you’re finicky, we could add the stellar 1991-92 time when Harshad Mehta pushed the market up 3x in one year and say this: Just five years of the last twenty two have accounted for nearly all of stock market returns

So remember Numbers present one side of the story but what is important to understand is why it happened?

Returns of the Asset Classes

Returns of asset classes like Equities, Gold, Bank Fixed Deposit, Property as per Economic Times ( Jan 2015).

Returns of Equities Gold Property Fixed Deposits in India

Yearly returns of Equity, Debt (Income Funds) and Gold (Ref : Economic Wealth Feb 2013)

Performance of asset classes from 2008-2012

Returns across various periods

From Livemint’s Why you shouldn’t buy only equities even for the long term, Returns of equity, gold, fixed deposit from Jan 1983 to Dec 2012 in 4 year time period

Returns of Assets over timeperiods

Returns from Jul 1996 – 15 Feb 2013 (Ref: Times of India 28 Feb)

Returns in various classes from jul 1996- Feb 2013

Returns from Jul 2004 – 15 Feb 2013 (Ref: Times of India 28 Feb)

Returns in various classes from Jul 2004- Feb 2013

Returns from Jul 2009 – 15 Feb 2013 (Ref: Times of India 28 Feb)

Returns in various classes from Jul 2009 – Feb 2013

Stock Market Returns

Stock market returns from 1 Dec 2007 to Dec 2012, annual returns,monthly returns are given below (Ref : Capital Mind  The Nifty in 2014)

While the annual Nifty returns from 1992 are given in picture below

Nifty Yearly returns

Monthly returns of Nifty are given in picture below

Nifty Monthly returns

Real Estate Returns

From Caporbit WHAT HAPPENS TO YOUR REAL ESTATE INVESTMENT IF PRICES CRASH? annual returns from real estate from 1991 to 2007 are given below.

Real estate price trend in India

The National Housing Bank (NHB) which is owned by the Reserve Bank of India (RBI) launched the Residex which is a housing price index in 2007. It started with a few cities and is gradually expanding to cover Tier-I and Tier-II cities in India. NHB kept the base year as 2007 and started the index at a value of 100. The NHB also provides city specific indices. For example in Mumbai they have broken down the city into various zones and there are separate indices for each of them. For example, Zone 1 is Cuffe Parade, Malabar Hill and Zone 6 is Bhandup, Mulund. They also cover areas around Mumbai like Thane, Navi Mumbai and Virar.

In the chart below, 2007 is the base year and the index starts at 100. Residential real estate returns as per Residex data, 2007-2014 is given below:

NHB Residex city wise index

 Fixed Deposit Rates

Fixed Deposit rates from 1991-92 are given below , the rate came down from 12% in 1991-92 to 4% in 2003-04 before going upwards

FD rates and Sensex returns since 1991

 Gold Rates

Gold prices in India have been in mostly in up trend but has come down in recent years from Goldprice.org

Gold prices in India

Prices since 1970-71 from our article Prices of Gold, Silver

Related Articles :

• Comparison of Fixed Deposits and Sensex Returns
• Ups and Downs of Sensex
• Prices of Gold, Silver
• Fixed Deposits and Tax

Just like balanced diet we need personal balanced financial plan with some allocation to Fixed Deposits,some to equities, some to real estate as per one age, risk profile and other factors called asset allocation. Numbers present one side of the story but what is important to understand is why it happened and use that to find out why it happened? Which asset class will do well going forward? What do you invest in Equities, Fixed Deposits, Gold, Real Estate? How do you decide which asset class to invest in ?

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