Since the age-old days, our ancestors have regarded gold as a very important investment avenue. However, in the present day, two popular investment avenues that have stood the test of time are real estate and gold. Both have their unique characteristics and potential for returns, making it essential to understand their pros and cons before deciding which one is the right investment option for you.
Investments can give you maximum returns when you choose the right option and invest accordingly. There is no such thing as this option is best. It all depends on the need, purpose, global scenario and risk appetite of the investor. If we talk about long-term investments, people have preferred gold and real estate. If we talk about facts and figures of the last 10 years, then according to data, gold has given a 70.12% return and the real estate has given 61.21%, so we can say both have given almost the same return over time.
Real estate may seem like the best opportunity since the property value improves over time. It normally outperforms in terms of returns when volatility is low. Gold on the other hand is an excellent investment beause it outperforms inflation. Over time the return on goldis in line with the inflation rate.
Investment in real estate is a good option for the super rich people who are few in number, because higher capital investment usually results in higher financial gains.
Investment in gold requires a reasonable amount of cash, keeping the current price of gold which is roughly Rs. 170,000 for 10 gm of 24 k, one can purchase a smaller amount at a time and keep on adding to it.
Gold is mostly considered a hedge against inflation because it can be redeemed quickly in the time of emergency and beats inflation in long-term to yield a healthy return. Real estate is also a growth asset but the biggest negative of real estate is that it requires high capital. If a downfall comes in the RE sector, it’s mostly prolonged.
When it comes to long-term investment, real estate does give you a higher return than gold. However, it’s not an asset that can be relied upon emergency as it takes time to move out of the real estate asset. Both are good assets and gold is considered to be a good allocation in one’s portfolio but we don’t suggest a high investment into it as gold is more of a hedge investment against inflation.
Real estate is frequently regarded as a secure kind of investment. Property values typically increase over time, giving one a feeling of security. Real estate investments can also produce consistent revenue by renting out homes. The economy can have an impact on property prices, and real estate markets might experience volatility.
Gold, on the other hand, is often seen as a safe haven investment during times of economic uncertainty. It has a long history of preserving wealth and acting as a hedge against inflation. Although gold prices might be erratic in the near term, its long-term value normally tends to increase.
The anecdotal wisdom has always pitched gold to be a safe investment, especially in times of crisis and fear in the market. The trick is to diversify one’s portfolio and keep holding gold as per one’s appetite. Gold is deeply rooted in Indian culture. Over the past 40 years, it has, on average, provided annual returns of 9.6% and is considered an investment of choice by most Indian households.
Real estate investments typically involve larger amounts of capital compared to gold investments. Real estate prices can vary significantly based on factors such as location, property type, and market conditions. People will not prefer to buy gold worth crores but prefer worth much more in real estate.
Compared to gold, real estate has the potential for better returns despite requiring a larger initial investment. Real estate values have typically increased with time, particularly in locations with significant demand. When investors decide to sell the property as a result of this appreciation, they may realise large profits. While gold prices can vary, they might not offer as much room for long-term growth as real estate.