Best Investments for 2011 – Equity and Gold

Best Investments for 2011 – Equity and Gold

Let us do some predictions with my crystal ball about the best investments for the year 2011.

Well, in my opinion, the best investments for the year 2011 will be equity and gold. And in my opinion, It’s the death of the FDs, Post-office savings schemes and PPF now.

This is because recently the US Government has announced US $ 600 Billion of QE2.

This means that the world economy will be filled with tremendous amount of liquidity and this newly printed money will dilute/shrink your wealth in the fixed income instruments silently by causing higher inflation.

Right now in India, the inflation rate is 10%+ and the Fixed income instruments are giving just 8.5% annual returns so right now you are actually making –2.5% annually from your Bank FDs, PPF & Post-office savings accounts in terms of the purchasing power.

Thus, basically your wealth in these financial instruments is shrinking and making you poor. Very soon, your retirement will be difficult because you won’t be able to live on the income from your these fixed income instruments anymore.

But well, the Equity and Gold will flourish like anything in the future because everytime, the central banks and governments will print new money, it will chase equity and gold and shooting up the price of gold and equity by several folds.

Thus, in my opinion, people should increase their financial IQ and learn how to invest in the stock market in the year 2011 and start investing in the stock market for the long term rather than pampering yourself that, Equity is risky and FDs/PPF/Post-office savings scheme will make you financially free in the future…!!!