betting on the indian knight

if you are an indian living and earning in the west, the question of whether to invest your hard earned bucks in your home country or in western market would have crossed your mind at some point. while i am not an expert in this matter, i thought of putting my recent learning on this subject here.

while the answer to this question is... 'it depends' on
your long term plans of settling in india versus usa
your marital, parental and mental status to estimate your risk tolerance
and many others, in almost all cases, investing in india is the best choice we can all make for ourselves for the good of self and of our home country.
here is why:
1. real estate in india has blown out of proportion in the last 3-5 years while the housing market in usa has been at an all time low... with plenty of houses in inventory but no takers, still showing no signs of recovery. those of your with big bucks, if you can invest in real estate in growing cities of india, thats best.
2. life insurance - we don't generally think of insurance as an investment, but rather as a protection scheme for our dependents. for those of us married and even expecting kids to arrive soon, life insurance is the best gift we can give our dependents.
this is one area where i find india far ahead of usa. innovative life insurance products offering has made it both an investment with guaranteed returns in addition to providing the safety net.
the best examples are the 'money back policy' where we get part of the insured amount at regular intervals of time and 'money plus policy' where we put in smaller amounts for say 3 years and get 5-6 times that amount after 20 years. there are various policies for children as well, and the money plus policy would do a world of good to your child by the time he/she is 20 years of age.
3. stock market / mutual funds - with appreciation in india being about 3 times more than that in usa which is at a mere 3-4%, here again india is a better choice. with the IT and BPO boom still on, a smart investor can hardly go wrong. with the iraq war goin wrong and usa govt creating a record deficit of 9 trillion dollars, its definitely not an attractive proposition when it comes to investments.
for people with less time and interest in researching stock market, mutual funds may be a better proposition. Advs of MFs over stocks are plenty... the major one being diversification of portfolio. we can also contribute *any* amount to this MF account on a regular basis and a MF expert will pool funds from various sources and invest in stocks with greatest promise. MF are more liquid in time of need with option to encash by end of day!
here again, indian MFs are consistently giving >15% return on investments last few years.

all in all, if you have got those extra cash, bet them on the indian horse if you wish... but definitely not the fatigued american horse.