Investing is for grown-ups

By: S Srinivasan/ Forbes India

Especially in 2011. All but the most hard-working and fastidious investors will be punished severely in a year marked by troubling predictions.

During the Christmas week, a text message hopped from mobile phone to mobile phone pretty much saying one would have made more money in 2010 by investing in onions than in equity shares, fixed deposits, real estate, or in any other asset class. And how true it was!

From its normal price of less than Rs 10 a kilogram at the start of the year, the favourite vegetable of the Indian poor zoomed to Rs 80 by late December before the government stepped in and brought it back to Rs 40 levels. If you had figured out a way to preserve onions for a year, you could have made anywhere between 300% and 700% profit, depending on when you sold. Compared to this, the equity markets gave a mere 16% and the deposit rates rarely crossed 8%. Real estate prices failed to breach the 18% mark even in the hottest markets.

Building wealth through onions is indeed a fantasy. But the price rise wasn