Returns that beat inflation and taxes

I was going through an interesting statistic in Times of India today- 6th may 2008. The article says

If you has invested Rs 10,000 a year ago in any of the following today it will be worth

1) Nifty -12595 ( ideasmoney comments--- this is roughly 26%. It manages to beat current inflation rate . effective return 26%-7.5%= 18.5%, no tax as long term capital gains rate for equity is 0%. , dividends that you would have got are a bonus!!)

2) Sensex -12502 ( ideasmoney comments--- this is roughly 25%. It manages to beat current inflation rate . effective return 25%-7.5%= 17.5%, no tax as long term capital gains rate for equity is 0%. , dividends that you would have got are a bonus!!)

3) Gold -12430 ( ideasmoney comments--- this is roughly 24%. It manages to beat current inflation rate . effective return 24%-7.5%= 16.5%, Applicable taxes would also shove off your returns and bring it down from 16.5%)

4) Silver -11802 ( ideasmoney comments--- this is roughly 12%. It manages to beat current inflation rate . effective return 12%-7.5%= 4.5%, Applicable taxes would also shove off your returns and bring it down from 4.5%)

4) Post office ( or other FD) -10850 ( erroneously given as 10625 in TOI???) ( ideasmoney comments--- this is roughly 8.5%. It manages to beat current inflation rate by a small margin. effective return 8.5%-7.5%= 1%, Applicable taxes would also shove off your returns and bring it down from 1%. If you are in highest income tax bracket your return would be effectively 0.7%!!)

So, when you plan to invest plan to beat inflation and taxes. For this reason, don't put all your eggs in one basket!!.

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3 comments:

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Ideasmoney said...

Shahid,
If you dontwant totake risk, keep your funds parked in FD. Always prefer SIP investments for equity fund. Start investing in well diversified equity funds.Fewsuggestions are HDFC top 200, Reliance Growth, DSPML equity. Write to us in case you need more clarity

Ideasmoney said...

HDFC prudence is a balanced fund.You can invest , if you are ready to lock in your money for atleast 2 years.

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