Expected returns from equity investments are higher than fixed income, but taxed far less. We keep hearing the refrain that equities in the last few years haven't even kept up with FDs. There are two fallacies here:
Larger companies continue to grow at rates higher than GDP, stay invested despite the news
Quite often we are asked, why should one invest in equities. The Indian economy is gloomy. Political instability tends to hog most pages of the news papers. The global economy is not supporting the news flow in any way. In this uncertain scenario, why should one take a Risk At all? Why not put all your money in a safe haven of ‘Debt’.