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The Scale of Fairness: Why Equity Trumps Property and Gold as an Investment

 The Scale of Fairness: Why Equity Trumps Property and Gold as an Investment

Investing is not just about growing your wealth; it’s also about engaging in a system that is transparent, equitable, and offers a level playing field. As investors, the questions we must ask are: how transparent is the process of participating in this investment? And who dominates the market and sets the rules? When evaluated against these criteria, equity or stock market investments often come out ahead of traditional favourites like property and gold. Here’s why.

Transparency and Accessibility

Equity Markets

Equity markets are highly regulated and offer a transparent investment process. With publicly listed companies, a wealth of information is available to investors, including quarterly reports, earnings calls, and independent analyses. Anyone with a trading account can participate, making it accessible to the average individual.

Property Market

In contrast, the property market is less transparent. Information asymmetry is common; sellers often
have more information about the property’s condition and its value than buyers. Also, high entry costs
make it less accessible for the average person.

Gold

As for gold, while it is relatively easy to invest in, the pricing can be opaque, and the market is less
regulated than equities.

Market Dominance and Rule-setting

Equity Markets

The rules in equity markets are generally set by regulatory bodies that aim to protect all stakeholders.
While institutional investors do have a presence, the market is made up of a diverse set of participants,
including individual retail investors, mutual funds, and pension funds, which creates a more balanced
power dynamic.

Property Market

The property market, on the other hand, is often dominated by real estate moguls and large developers.
They have a significant influence on market prices and the rules of engagement, making the market less
fair for individual investors.

Gold

The gold market is influenced by a variety of factors, including central bank reserves and large-scale
buying and selling by global institutions. This makes it susceptible to manipulation and less fair for the
small investor.

Liquidity and Diversification

Equity Markets

Equities offer high liquidity – you can buy and sell stocks within seconds. They also offer the opportunity
for diversification, allowing you to spread risk across sectors, industries, and even countries.

Property and Gold

Property investments are illiquid and require a long-term commitment. Gold, though more liquid, offers
less scope for diversification.

Inclusion and Social Mobility

Equity markets offer a real opportunity for social mobility. With minimal starting capital, anyone can
invest in a business and reap the rewards of its growth. Such democratic access is less prevalent in the
property and gold markets.

While property and gold have their merits, if you’re looking for an investment avenue that is
transparent, equitable, and offers a level playing field, equities are hard to beat. Not only do they offer
high liquidity and diversification, but they also allow for democratic participation, contributing to a fairer
financial ecosystem for all.

Abdul Waheed

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