Raju is a young entrepreneur passionate about launching a new product.
To fund his idea, he brings in like-minded investors as equity shareholders — partners in profits, but with no downside protection.
The money raised is still insufficient, so he approaches a bank for a loan. The bank agrees to lend for 5 years with fixed interest payments, irrespective of whether the business succeeds or fails.
Next, Raju needs office space. A real estate company leases him a property with fixed monthly rentals and annual escalation clauses.
He also plans to buy gold jewellery for his family every year.
Now imagine you had the opportunity to participate in Raju’s journey.
Would you rather be:
- An equity shareholder?
- The banker?
- The real estate owner?
- Or the gold seller?
If we think deeply, every smart entrepreneur first estimates whether the business can generate returns higher than all these costs:
- Interest to the bank
- Rent to the property owner
- Salaries to employees
- Gold purchases for the family
- And other operating expenses
After paying everyone else, whatever remains belongs to the equity shareholders.
That is the nature of equity investing.
- Deposits provide stability and fixed income.
- Gold acts as a defensive hedge.
- Real estate can provide inflation-beating returns over long periods.
- But equity captures the residual growth of enterprise and wealth creation.
This is why, historically, equity as an asset class has delivered the highest long-term inflation-beating returns — though without guarantees.
However, for every successful Raju, there may be thousands who fail.
That is why diversification is critical in equity investing. Not over-diversification, but sensible diversification. And if direct stock investing feels difficult, passive and active equity mutual funds are excellent vehicles.
The bottom line:
A disciplined, diversified, long-term equity portfolio remains one of the most powerful tools for wealth creation.
Use:
- Fixed income for stability,
- Real estate for diversification,
- Gold as a hedge,
- But equity for long-term growth.
The biggest risk in equity investing is often not volatility…
…it is failing to stay invested long enough.
Happy Financial Planning!
Naveen Julian Rego – CFP®
MD & Principal Officer
Naveen Rego Capital
SEBI Registered Investment Adviser
Reg No: INA000019211
BSE Membership ID: 2178
Date: 16-05-2026
Disclaimers:
1. Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.
2. Registration granted by SEBI, membership of BSE and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
3. Financial products recommended by us which are under the jurisdiction of other regulators are beyond the scope of SEBI’s grievance mechanism.
