Short Note for our Clients – Trump Win & Modi’s Strike on Black Money

Donald Trump wins US Presidential – against all odds & predictions. Most of the opinion Polls were giving 95% chances to Hilary until the end of Voting & then what happened is visible in this picture.

We shared this note with our Planning clients on 10th Nov 2016

poll-predictions

In 1981 Bill Gates predicted “640 KB of memory will be enough for most of the people in future”.

Not sure who said this but this is an awesome line to remind ourselves regularly – “It is difficult to make predictions, especially about the future.” In 2014 we wrote this article on TFL (you Must Read) – Predicting is not a good habit in your financial life 

You may still ask but what will happen to our investments especially equity? But my answer is I don’t know – we have not made investments for 1 month or 1 year it’s for

But my answer is I don’t know – we have not made investments for 1 month or 1 year it’s for long term. We strongly believe that businesses are here to increase their profit (including the companies that you run or work for) – people will always be interested to invest in such businesses through equity markets.

Change is tough for everyone – world & financial world may take some time to adjust but remember Nick Murray’s words “The world does not end, it only appears to be ending from time to time.”

The-world-does-not-end

Attack on  BlackMoney

It’s not the first time India did this but still lot of credit should go to current govt to take this step to curb Black Money Menace (let’s stick to the economy). In short term I see there will be some pain as Black Money in last few decades built a parallel economy. So people who are part of it – either who own it & earn tax free income on that or everyone who get’s benefited when some part of it flows to them including workers, shops, industries or anything that you can think of will freeze for some time. Real estate prices & luxury goods market will have significant impact as it was the biggest beneficiary of black money – this we always discussed in the past. Must Read: Greater Fool Theory & Indian Real Estate

cash

But for positives there’s a long list if in the future new Black money is not allowed to be created:

  • Higher Tax Collection
  • Lower tax evasion
  • May be lower tax rate in future
  • Enough liquidity in banks to give loans
  • Notes that will not be exchanged will reduce liability of RBI
  • Affordable Houses
  • Lower inflation etc

Overall it looks very positive as in next year GST will be there, which will limit opportunities for corporate to deal in black money.

Our Suggestion on this 9/11

Let’s focus on the goals & the things that we can control – so keep a check on your expenses & work hard so you don’t lose your current job or work.

And don’t believe on media – they don’t know anything that can help you in achieving your goals. Don’t focus on #Rexit #Brexit #Trump noise that is created by media – it’s their job to grab your attention to increase their TRP & advertisement revenue. No one has any clue that how an event will affect equity markets. In short-term few of them will but which one? In long term markets are slaves of earnings – if companies will generate profits, investors will pay for it. You should make a conscious effort to avoid such noises – avoid watching the financial news or reading the pink paper.

And in the end the “Serenity Prayer”:

“God grant me the serenity; 
To accept the things I cannot change; 
Courage to change the things I can; 
And wisdom to know the difference.”

PS: I have shared this in #LifePlanning newsletter if you haven’t seen this earlier – take out some time & watch this Video by one of my favorite author Nick Murray (if you want you can skip initial 4 mins intro)

Finally, a message that we frequently repeat – Investing is not a Number Game, it is a “Mind Game”.  – If you have any questions feel free to ask.

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