Real Estate Vs Stock Market Investing

There had been a prolonged debate on whether Stock Market Investing could yield higher returns than Real Estate or other orthodox investment heavens like gold, silver etc. In our little research we are been able to find out some staunching details on many real estate properties around Mumbai which has given more that 20% annualized returns over past 40 years or more.

Film actor Rajesh Khanna bought a bungalow in iconic Carter Road in Mumbai for Rs.3.5 lakhs in 1970. His heirs sold it recently for Rs.85 crores. The property has multiplied by 2428 times or an annualized return of 19.38% over 44 years. 

Samudhra Mahal in Mumbai is another expensive property. A flat purchased in 1970 at Rs.700 per sq.ft was sold at Rs.1,18,000 per sq.ft in 2013. Money multiplied by 168 times in 43 years. This works out to an annualized return of 12.66%.

In 1963, Godrej paid Rs.1 lakh to buy his first house, a 2916 sq.feet apartment at Usha Kiran, Carmicheal road, in tony South Mumbai. In 2011 he sold it for Rs.25 crore. Money multiplied by 2500 times over 48 years or an annualized return of 17.70%.

In Dalal Street, Mumbai a sq.feet was Rs.100 in 1980. After 34 years, it sells at Rs.27,000 per sq.ft. Money multiplied by 270 times in 33 years. This works out to an annualized return of 17.90%. 

The first three properties can be bought and owned by cream or elite of the society who are worth at least tens of crores, mostly hundreds of crores. 

The last property is Sensex. A sq.feet is a metaphor for one unit. If dividend yield is also included (assuming 2?GR), Sensex would have delivered 20% annualized returns over last 34 years, higher than the most expensive prime properties in the country. 

Good mutual funds and many stocks have delivered returns far superior to Sensex itself. 

Power of equity is least understood in this country till now.

If you can withstand notional loss (if you don’t book) in portfolio during bear markets, not worry about daily price movements, it is possible to make much better money than what can be made out of best of real estate. 

Give at least the same importance to equity as you give to real estate or any other investment.

You don’t mind holding real estate for 20 or 30 years. Please do the same for equity ignoring bull and bear markets, notional profits and losses. 

Many of you have been investing for last couple of years. Stay the course for at least another 15 to 20 years completely ignoring market fluctuations. You would be amazed at the fortune created for your retirement or to pass on to your children.

Off course selection of good fundamental stocks, timely rejug of portfolios, periodic analysis on sector & segments can act as shield & sword in the fight to conquest the highest returns from the market.

If you are still out of the race from Equity Investment, its better late than never. Start with opening your Free Demat Account with our partners Upstox or Angel Broking Ltd & get onboard with other successful investors. 

Investment in equity market always bears certain risk factors, hence always keep consulting your financial advisor for more details.