Commodities prices are shooting thru roofs because of the recent geopolitical reasons.
This will lead to a rise in inflation in near term.
We’re already at 5.5% inflation.
FDs now offer 5.5% interest rates only.
This means post inflation FD returns would be zero to negative in near term.
Real Estate needs lumpsum capital. For a country like India having per capita income of ~₹2 lakhs, Real Estate is still not that attractive despite the stagnant prices in last decade.
This brings us to remaining 2 assets classes: Gold & Equity.
Gold is a favorite investment for Indians.
With increasing financial literacy, the awareness of equity investing is increasingly day by day. The fact that CDSL opened around 2-3 crore Demats in last 1 year indicates equity as emerging favourite asset class among Indians.
Even a less salaried person, with demat, can invest money into equity irrespective of minimum capital requirements.
Obviously, the beneficiaries would be depositories, AMCs – Mutual Funds, broking houses, and Indian equity markets at large.
