Demonetisation ill effects will taper by year end: Rakesh Jhunjhunwala

Noted investor and stock market guru Rakesh Jhunjhunwala says the ill effects of demonetisation which people are worried about will taper by December and that people should trade in stocks only if as full-time investors, or else park the money with mutual funds.

"Demonetisation will bring 30-40 per cent dormant money into banks," Jhunjhunwala said in an investors' meet organised by BTVi, a channel for Indian and global news and views on business.

"Also, this money is not going to be withdrawn fast. On the longer term, what it is going to do is drive this money into creating financial assets," he said, while asking people not to go by the so-called experts.

Asked to predict the scenario in the short-to-medium term, Jhunjhunwala said till December it will remain opinion-driven. "After mid-December, things will come back to normal and consumption will start. Consumption and expenditure will not be as much affected as people are talking," he said.

"The economy will bounce bank much faster."

He said while investing people must be wary of unsolicited advice, "Don't go by tips like 'my father told me', 'my husband's friend has said'... Take professional help while investing. In fact, why don't you invest in Nifty, that's best -- it's got all the sectors," Jhunjhunwala said.

"See, the romance of the Dalal Street analysts with the sectors is so shifting, it is difficult to fathom it."

Jhunjhunwala, who has eventually decided to give away in charity 25 per cent of his portfolio or Rs 5,000 crore, whichever is less, said it may be a good time to buy real estate stocks, but added that his prejudice has always remained towards equity, as opposed to other asset classes like gold.

"If you have risk appetite, my advice is, as far as possible, put it in equity. Equity has given far greater benefits than any other investment."

As regards real estate, he said such investment was not only most ill-liquid, but price discovery is also difficult. This apart, the procedural matters and the logistics involved in entering realty and exiting it was also daunting.

"Real estate is not a bad investment. But it is a very inconvenient investment."

Asked by a member of the audience how he can help his sister who spent her lifetime working but has no investments worth her name, Jhunjhunwala said: "You can simply start selling in her name. There is no gift tax involved... Saving is the mother, then comes proper investment."

He also said that when it comes to dealing with women, especially in rural India, one must not resort to sympathy. "Please you must tell the women that they have to fight. Encourage her, empower her. Sympathizing with her only makes her feel weak."

And as far as children go, a habit of saving must be inculcated in them, he said.

 

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