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Wednesday, July 24, 2013

No Investment Option is a Magic Bullet

All investment advisers and analysts are facing a rough time addressing their audience — be it a paying clients or just media viewers and readers. 
Nothing seems to be working any more. Equity investments haven't made any progress upwards for close to six years. At the present, bonds have also turned volatile. Fixed Deposits earn nothing much when compared to inflation. The time of gold too seems to have past. Far too many individuals have their cash trapped in real estate where the asset value isn't appreciating and interest rates are starting to bite.
If convention was to be followed, then at some point in this post, you would be expecting me to come up with some form advice, some arithmetic, algorithm or formula that I would claim enables you to evade the crisis in investing and earn some decent returns. Unfortunately, no such magic bullet exists here or anywhere. As the popular joke goes, “it’s like this only”. Remember, I’m not being pessimistic here!!
Proper management of your investments, at the end of the day, only works where you have a distribution between good investment options and bad ones. The job of portfolio management then comes to avoiding bad investment options.

Depending on circumstances, there may be few good investment options or there may be more, or there may be those options with a high degree of uncertainty. However, nowadays, we don't really have a scenario where there are any investment options that you can call good with any degree of certainty. The reality is that, in every part of the economy, the chickens are coming home to roost.

So if you are looking for an investment option that will definitely beat inflation and give you some respectable return on your investment while performing as you would reasonably anticipate, then there's none. It's a matter of keeping the faith and believing hard that things have always got better in the past and so they will this time round.

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