Go for GOLD

Inflation is 12% plus (officially that is. unofficially it is much more)

So where do you invest?

Bank Fixed deposits are not attractive since the inflation is higher than the Bank Interest rates. This means erosion of your capital in the medium term in real terms.

Share Market has followed the global financial market meltdown and have lost nearly one third of its capitalization. Maybe a good time to buy. But you need to buy wisely, in companies that have shown a sustained performance even during bad times. Also means invest in those companies who has a sound management and strategic perspective. In short, buy blue chips when they are traded at a low. They are likely to bounce faster than midcaps. But buy keeping in mind the long term returns. Do not aim for quick returns. You have to be patient. Dont invest in mutual funds, but invest directly.

Real Estate is a strict no no. Interest rates are higher. Property is over priced. Building materials are expensive. Rental income has not risen in line with the property price. The market may have peaked or is on the verge of a downturn. Be careful.

That leaves my trustworthy friend - Gold. It is always a safe bet to buy Gold during the times of high inflation. But never buy ornament gold. Always buy 24 carat Gold biscuits that are sealed and numbered. You get swiss gold under the brand name Pampa in Kuwait. You can buy either 10gm, 20 gm, 50 gm biscuits. Or alternatively take the route of Gold bonds. Since it is easy for a layman to buy the gold biscuits, go for it.

It is Olympics time. Let us follow the motto of the atheletes......

GO FOR GOLD