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Importance of Asset class
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Question: EPF / PPF vs Equities
The rate of returns for Employees Provident Fund (EPF) / PPF are low.. Say 8%. Of course tax free.
They are suitable to high tax payers only and even for them, it is to a limited extent.
Equity is a far superior asset class since it gives like 15% CAGR returns over long term.
Of course it carries market risks and volatility. Hence investing in the right way is the important.
Hence use a mix of say 75% Equity Mutual funds + some quantum in Index / ETFs and very small manageble quantum in Equity shares.
Yes. If you are too much into PPF and too less in Equities and you still have time for your long term goals, you need to realign.
Related Lessons
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