There are a lot of iPhone lovers but what if, with the same amount, you could actually double your money in a couple of years.
Apple has finally launched the most awaited phone of the year, iPhone X on Wednesday with loads of features which can take your breath away — tempting, right?
Well, if you are an investor you would have thought how can I make my money work for me given that Rs 100,000 is not a small amount.
An iPhone is not comparable to stocks but we spoke to analysts on D-Street on they would do if they have an option to buy an iPhone or stocks for the same amount.
The iPhone X will be available in India from November 3 starting at Rs 89,000 for the 64 GB variant, while the 256 GB storage variant will cost around Rs 1,00,000.
Yes, there are a lot of iPhone lovers in India and abroad but what if I tell you that with the same amount you could actually double your money in probably couple of years considering the fact that we are in a bull market.
“Buying an Apple mobile out of a desire would be a choice of many people, however purely from opportunity cost point of view, the mobile of such a big price tag would not be economical,” Shrikant Akolkar - Research Analyst, Angel Broking told Moneycontrol.
“A mobile would only depreciate in value, no matter which brand it is. Companies also continue to slash prices as soon as the new model is launched, so an expensive mobile which one is buying would not be worth even 25 percent of its original cost after 4-5 years,” he said.
Akolkar further added that an MF or equity investment would appreciate at 14-15 percent CAGR during the same period. “Purely from a returns point of view, investing in stocks or mutual funds would be a better option,” he said.
The S&P BSE rose over 20 percent so far in the year 2017 while the Nifty rose 23 percent in the same period. Equity will be in limelight for the years to come especially after fixed income, real estate and gold have disappointed investors.
Analysts on D-Street are talking about a level of 17000 on the Nifty50 in the next 4 years.
Investors will be better off putting their money in specific stocks rather than buying a depreciating asset, which could create wealth in the next couple of years, suggest experts.
“Buying an asset by way of investments in either stocks or mutual funds is a much better option than spending money on an iPhone X. The correct stock picking could create enough wealth for investors to maybe buy 2 iPhones in the next few years,” Jimeet Modi, CEO, SAMCO Securities told Moneycontrol.
Stocks & Funds to BUY:
Investors will be better off picking up quality stocks if they have Rs100,000 money in hand which includes companies like Asian Granito, Navlar Corporation, Maruti Suzuki, KEI Industries, Music Broadcast, Tata Power, Torrent Power, Havells India, REC, BEML, and Coromandel Fertilisers.
There is another way investors can use the spare money by putting in mutual funds either by way of systematic investment plans (SIPs) or by one-time payment for a period of 4-5 years.
“SIPs are good for retail investors who are not actively involved in markets and there are many good MFs one can choose to do SIP in – take the top performing large cap MFs over the past 5 years and invest in those,” Rishi Kohli, CEO, Pro Alpha Capital told Moneycontrol.
Diversification is the key to smart investing. Investors can look at diversifying the amount between SIP & stocks. While investing in equities one requires skills, knowledge, risk-taking capability and time to beat the market.
“Many investors directly invest in equity for more return, but most of them underestimate its risks looking only at the reward side,” Johnson Kandi – AVP – Business Strategy & Learning, KIFS Trade Capital told Moneycontrol.
“The model portfolio should have SIP (30%) + Direct MF (30%) +Equity (40%). The sector which has looked to bottom out looks to be Pharma & Infra Sector. Till the next launch of iPhone a SIP of Rs5000 in each of the sector looks to be promising and may reduce the cost of purchase via returns you will fetch from these investments,” he said.Top funds to bet on include names like Reliance Pharma Fund (Pharma sector), TATA Equity PE Fund (large cap Fund), L&T Infrastructure Fund.