Nifty to 1 lakh!

Nifty has a good likelihood of going to 1Lakh in the next 20 years. There also exists a good chance that it stays exactly where it is now (of course with massive swings in-between).

If you put this same amount in a government bond now, you would have turned your 18000 rupees to 1Lakh with a certainty (backed by the Indian gov).

So, what is your reasoning to invest into equity? I’m interested in knowing your thoughts…

  • Bonds sound like a good idea
  • No, I’ll stick with equity

0 voters

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Is the taxation the same for both Nifty and Bonds? if there is, then this could be the difference.

Do we have govt bonds with tenor of 20 years

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equity taxed at 10%( but no indexation, 1lakh exemption), debt at 20%(with indexation) for ltgc.

you can get bonds up to 40 years maturity

So, that’s about an extra 6% compounded saved on tax, which only makes bonds a more attractive bet.

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This is personal finance, so the choices are personal which have to be taken after considering a lot of things. One cannot simply choose one over the other. It has been proved that equity in the long term gives inflation beating returns, but that comes with a lot of caveats, with emphasis on green and not on red, and almost no indication of the opportunity cost. And debt is real, it is secular, it is almost absolute, depending the product chosen. They both are needed, if there is such a need.

If one has a goal, then goal setting w.r.t time, return needed, asset identification, asset allocation, management, has to be followed. If no goal in mind, no necessity, then we have a lot of products today that we can look at and participate.

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Lots of terminology with no real information.

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Because this is personal :face_with_spiral_eyes:

What suits me does not necessarily suit others, as simple as that.

To give an example, say I choose to buy a Nifty Midcap 150 ETF and buy irrespective of the price, whenever I feel like it, now can you think about why I am buying this and what I am expecting from this?

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No offence but even I felt the same with many of @GB26 posts. The original post asks for your thoughts on equity. But your reply is more like a general one.
Having said that it is always good to read what you say.

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Because he’s GB aka Gyani Baba

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All these large numbers are much smaller as inflation will take away a decent portion.
For me its choice c - trading. For as long as i can compound. After that the standard answer is to have diversification between different assets. Equity pays more but is uncertain, debt less and inflation takes away a large portion of debt returns. Look at Dalio all seasons portfolio type of things.

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Since we have positive interest rates atm, I’m anyway going to make some returns trading. My only focus is to have as little drawdown in my capital as possible. So in this regard, equity makes no sense to me (having 65%, possibly 85% drawdowns).

The only bond I saw on GoldenPi that has this tenure and return is:

NATIONAL HIGHWAYS INFRA TRUST
Min. Investment. ₹ 5,21,829.13
Yield. 7.8%
Maturity Date. 25-Oct-2047

Risks: inflation, currency depreciation, timing risk of one-time investment, zero skill building
Benefits: one-time fire and forget (enjoy free time)

Equities:

Benefits:
can do SIP (returns even if index stays the same), easier on the wallet, can give higher returns sooner

Risks: falling of the bandwagon of SIP, no guarantee of expected returns

Purely personal benefits for me:
Skill building as a trader/investor
As a trader with leverage, even nifty returns are too small, can do better than both options.

In case you have not noticed, I give practical and actionable suggestions too, but only when I am reasonably sure of the outcome. If I am not, I will reply with just information and my thoughts.

This is online forum, despite that, some people who have no idea how things work, may believe what others say and do that, and if losses happen, and I said that, I could be responsible for that. So I present general, broad picture.

Where I have absolute clarity, I will say so, something like with PPF.

On a different note, I have had a little praise and recognition elsewhere, for my thought process, for my way of presenting things, for my perspective, it may have been considered as wisdom too, so even if members of this forum don’t look at it that way, it is alright.

Coconut is coconut, mango is mango :grin:

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yes, using pledged Nifty holdings for trading does not make sense to me either as max DD can be terrible. But for a portfolio that is not traded, equity is probably the best way to invest over long term but there is uncertainty and deep drawdowns as tradeoff. As long as you don’t sell when market falls a lot, its good.

out of context, I thought this was a phrase or a quote or something and searched. What came out was even more baffling which I never knew.

Note: The term coconut was derived from the Portuguese and Spanish word coco , meaning ‘head’ or ‘skull’ 16th-century. This term was introduced because the coconut shell resembles facial features. Its species name nucifera was derived from a Latin word meaning ‘nut-bearing’. It consists of liquid endosperm in the form of coconut water. The English word “mango” originated from the Malayalam word manga (or mangga ) during the 15th and 16th centuries. It is the national fruit of various countries including India, the Philippines, and Haiti.

wow - manga - Keralites must be super proud…

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You know juggernaut? Do know, you will be even more surprised :grinning:

Absolutely true but you have to wonder, what exactly is your recourse when markets crash? Only hope, which honestly scares me.

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You are always hoping that markets will move higher.

Crashes are one of best times to invest, provided you can keep your nerve ( it can continue to crash …) and have a long term holding period. I have held through 2008 / euro crisis / 2020 and did ok. I had to invest on crash due to ELSS during 2008 times, that did very well. Problem is that its better to be invested than wait for crash if you don’t have any other option. So buying on crash can be tough and you have to live with the bad newsflow and drawdown during the crash. Just ignore the noise, and its better to have a plan for these things - some kind of periodic re balancing will help. Active investing based on ta can probably mitigate this to some extent( dunno have not tried), but that needs skills. So for most SIP + portfolio of different things is probably the best way.

Since we can trade, we have option to deploy some of the capital in these once-a-decade crashes.

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Let them fall :grin:

As you were younger, so perhaps you did not know the gravity of the fall, or did you?

Unlike you, no one emphasizes on DD :+1:

It does, one can wait, build a position slowly.

I used to follow markets since much earlier, not too much just a ticker box in timesofindia plus news sometimes. But did not know much, and in 2008 ( just 1-2 years into job) had no idea but did not sell, Then ELSS time came and we needed to give info earlier to company so invested more. That worked out well in helping portfolio through the DD.

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How did it help the PF in DD?

ELSS contribution did not go down, or did you contribute when market was at low levels?