Have Little Faith In Equity, Not Just In Gold And Real Estate, Says Vijay Mantri Of JRL Money

People have very little faith in the equity market where wealth creation has been the longest and the best, said Vijay Mantri, co-founder and chief investment strategist at JRL Money, highlighting Indian investors tend to invest in gold and real estate without any apprehension despite lower returns compared to stocks.

With Indian investors, asset classes like gold and real estate have always been considered solid investments. There is very little apprehension attached to these asset classes when compared to the fear of investing in the equity market, he noted.

Mantri advised investors to have little faith in equity as well.

Gold and real estate may be considered the safest options as they are a safe-haven investment to many amid domestic uncertainties and global tensions.

"Interestingly, people made money in gold and real estate, not because of them but because of the holding period," said Mantri.

People tend to hold these assets for a lot longer when compared to equity market investments. According to Mantri, from 1946-1966 gold did not deliver returns, while from 2011-2018, it gave nominal returns.

"I have seen decades where gold has given no returns; despite this, I never hear people complain," said Mantri. A large part of gold globally is held by the Indians and the Chinese, so it's not necessarily a global favourite as an asset class. Despite this, the domestic demand for gold has always been on a steady climb up, he added.

The way people own gold assets is also interesting. The value people give the asset might be different from what it actually fetches them. "No one talks about CAGR or drawdown when it comes to gold," he said.

During the customs duty cut, when the gold prices dropped, Mantri said, people immediately considered buying gold.

Whereas, if the equity markets were down, Mantri said, people would still be apprehensive of buying a dip. The first choice of investment remains gold or real estate, for most Indian investors prefer them despite the returns.