Hello /biz/ is anyone over here experience outside the American economy? My question is in reference to India.
Sorry to have to ask this question but I'd like a serious, well measured response.
I'm not looking for any strategies and tips, I just want to know, how much return would the average, long-term stockbroker earn?
I'm not sure if I should just hand over my money to the banks and kick back or not.
The risk free rate of return is usually around 8ish percent, would I earn more on the stock market if I am of the most mean intelligence or do sharp, experienced individuals account for most profits while the median stockbroker makes losses?
I've never traded in the Indian market, but from what I heard, a large percentage of the "gains" would be related to individuals and families with inside knowledge, government fixing and other such practices an outsider can't fully participate in.
>The risk free rate of return is usually around 8ish percent
Do tell me more about this.
>Do tell me more about this.
I'm sure there is a similar concept in America, it's basically the interest rate of bonds.
Our central bank (I think it's each year) gives us a percentage that is the "risk free rate of return", i.e. the percentage return you could get on your money in the safest possible fashion.
More or less this is around 8 percent per year, the interest rate on our bonds.
Your performance ought to be compared to this amount is the point of it, if you're putting out a return of anything less than 8 percent it would have been better to stick that money in a "fixed deposit" or in government bonds.
I know what bonds are lol, I meant why is the riskless rate so high? I'm not American but I believe US bonds would typically give about 5% per year, and where I'm from it's even less.
Oh yes, we have one of the highest in the world I believe.
The US is still in quantitative easing right? I figured they'd have it below 2 percent even.
Our central bank really tries to rein in the inflation, which seems to be working pretty well. They're getting pressured to decrease tem though.
Our inflation rates tend to be high, most would estimate them to be about 6 or 7 percent usually.
Foreigners have been reeling out there money recently though, 'murica is going to be raising it rates so, probably because of that and how our currency is doing pretty badly compared to the dollar (the latter has a lot to do with the former too).
I don't really keep up with this stuff much, I split my investments between stocks and real estate, never touched bonds in my life.
That's not to say bonds aren't a good option, my situation is specific as local real estate has been at a steady incline for years so I've been riding that wave.
Well, investing in other countries is probably a hassle anyway, compared to its returns.
I suppose it's better to just keep a track of global developments that could affect your county, such as the oil prices.
How fast is this wave?
>How fast is this wave?
Well, a square meter of an apartment or house has gradually went up around 40% over the last decade in the place where I live. Add to that the fact that I buy cheap when a building is only starting to be built and sell when it's finished, and I used to make an amazing 20% on each investment.
It's slowly dying down now so I'm down to 12-13%, but that's still a great return at a very low risk.
I'm in the capital, and an enormous number of people from other towns and the countryside are flooding it. So the city is expanding, new buildings can hardly keep up with demand, and locations closer to the center are growing in price.
If I remember right, Texas has a very high population growth rate.
Sorry, I just assumed you were from America and forgot you had said otherwise!
Ah, for some reason I find it very strange that East European countries ever face physical growth in terms of construction and such.
On a side note, is the situation in Kosovo affecting y'all?
Isn't that sure fire with any real estate, just buy on the perimeter of growing urban areas? India is big on gold because of history, their currency and monetary system regularly collapses. Like someone else mentioned, keep away from the industrial toilet complex in those parts of the world, you need plumbing infrastructure first.
>is the situation in Kosovo affecting y'all?
Not since we split from Serbia in 2005.
Being bombed in 1999 over that whole mess obviously left some long term consequences, but it's hard to calculate.
>monetary system regularly collapses
Hmm? What do you mean?
> just buy on the perimeter of growing urban areas?
Well your investment isn't going to depreciate but I don't know if it would be sure fire everywhere. Sometimes the returns aren't that spectacular, not to mention how in India it isn't uncommon for projects to get stuck in a limbo.
Builders here and infamous for having "informal" connections and generally being total hacks.
That's what I was told by some people who regularly did business in India, why their streets are littered with gold dust. Like many countries their monetary system gets abused and inflated, that was a long time ago though, maybe they have more faith in their monetary system today.
Yeah at this point its hard to say how long physical growth can go on, only as long as the natural resources can feed urban sprawl. Also, all of the good land was owned centuries ago all over the world. You would want to examine any real estate purchase carefully, look at the history, check legalities but generally buying on the perimeter of growing urban areas is almost guaranteed to appreciate, however you have to factor in transfer and legal fees, property taxes and everything else.