We normally find Gold, Stocks and Real Estate moving in different directions. Loss of one could be a gain for the other. There are certain factors contributing to this peculiar ball game in the investment options. Staying strong and taking the world out of the mayhem caused by the Coronavirus pandemic conditions across the globe, we are fortunate to see the whole economy slowly emerging out of the dark tunnel of uncertainties. Even while the vaccination process has already commenced in a number of countries, corona cases have suddenly shown a soaring curve causing anguish but the economic activities have not stopped. Looks encouraging!! The world has learned how to live with Corona, this unwanted unwelcomed intruder in our life.
Global markets crashed in March 2020 showing no remorse to the small investors but the crippled world somehow managed to keep moving with a few sectors finding the time of their life as the sales turnover zoomed. Lockdowns and confinement of people within the boundary walls of their houses, left them trying various options to remain busy. Whereas, the entertainment and travel-related industries suffered, there was a piece of good news for online platforms, consumers, media, Pharma, and communication industries as the consumption of internet data increased.
The pernicious Corona started its venomous bite in Feb. 2020, as the following images illustrate the sudden impact on Gold and Stock markets in the USA. Dow crashed to 20900 levels after achieving the unprecedented highs of 29000 earlier and gold showed nervousness at $1566 levels on 28th Feb 2020.
Whereas, the Dow Zone has spiraled up to unprecedented 31000 levels, the International Gold @$1566 per ounce in Feb 2020 has consolidated to $1880 levels today after peaking to levels of $2067 during the year 2020.
The Indian markets were no different as the nervousness lit large everywhere. Sudden lockdown forced lakhs of workers with meager belongings on their heads walking hundreds of miles to reach their native villages. It was a heart-burning scenario for the people watching their countrymen subjected to inconvenience in the absence of proper transportation and lack of cohesion between the state and the federal government.
Indian gold prices tumbled due to very low demand from domestic customers. However, Gold prices at Rs.43200 per 10 gm in Feb 20 has also shown prominence by moving up to Rs.49300 per 10 gm as of today after touching the historical highs of 52400 in November 2020.
Moving with the International sentiments, Nifty slipping down to unbelievable levels of 8000 in March 2020 has recovered smartly to unprecedented levels of 14595 as of today. Smart investors have made tons of money by investing at the right time when everyone was exiting the markets in panic and desperation. Nifty 50 trading at around 7600 in March 2020 has doubled the money in less than a year. Your self belief, courage, confidence, preseverance never goes wasted when it comes to investments.
During these turbulent times, we saw the concept of three avenues of investments never going hand in hand as they form parallel lines in the global economies without any exception. The three options of investments being Real Estate, Gold, and Stock Markets. The money keeps oscillating between these three strongest pillars of the economy. The liquidity pushed stock markets higher being the convenient way of entering and exiting any time while sitting at home. On the other side, the purchase of property, and physical gold proved cumbersome exercise.
Gold, Stock Market, and Real Estate never move in tandem. While the quality stocks kept moving the stock markets, the big players ploughed money into gold as the best remedy of uncertainty in turbulent times. Despite infusion of funds and consumer-friendly policies devised by the Government, there were no takers for investing in real estate during the year 2020. Hundreds and thousands of built or partially built apartments are standing unsold for the lack of interest, by the end-users. However, with the consolidation of gold prices, the demand looks picking up in real estate now.
With stock markets, and gold prices going through the roof, the best options lie in Real Estate now. Valuations of quality stocks have reached a point of consolidation and gold prices are also stabilising after achieving 25% growth in one year only. Right pockets may be explored for picking up rental or commercial properties for eyeing on the passive income.
Friends, the basic principle behind every investment is to create wealth by earning good returns from the investments regularly. Early retirement is possible only if you accumulate enough wealth for you to afford your current lifestyle. Believe me, a timely investment in real estate/stock market/gold can help in creation of wealth to earn passive income later on.
During the past ten years the gold prices in India have gone up from Rs.18000/- per 10 gm. to Rs.50000/-. Nifty(Stock Market) has gone up from 6134 levels on 31/12/2010 to 14595 today. Real Estate has also given tremendous returns over the last ten years.
Conclusion: What are you thinking about dear friends? Try to understand the movements of these three pillars of the economy by correlating the circumstances as stated above and invest at the right time in the right option.
Links for following the various global markets:
- https://www.moneycontrol.com/indian-indices/nifty-50-9.html
- https://www.nasdaq.com/
- https://money.cnn.com/data/markets/dow/
- https://www.marketwatch.com/investing/stock/ASX?countrycode=AU
- https://www.marketwatch.com/investing/index/DJIA
- https://markets.ft.com/data/world/countries/hong-kong
- https://tradingeconomics.com/japan/stock-market
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