Will This Demonetization Scheme is Promising for Stock Market Must Read

1. Will This Demonetization Scheme is Promising for Stock Market? Must Read. The demonetization scheme has been polarizing the country since its announcement i.e. on 8th November 2016. This move had a big impact on the stock / share markets. Let us see how this will impact on the stock markets and share market. In the long term, the mutual funds will be benefited from this demonetization scheme. Banks will soon reduce the (fixed deposit) FD rates. Some banks have already reduced these. As a result, citizens will have the tendency to shift from bank to mutual funds, to get returns on their investment more than inflation rates. As a consequence, investments in mutual fund market will increase. This would continue for some time. Good equity mutual funds investment in fundamentally strong stocks would be a better option in this scenario. The reason being that stocks with good fundamentals, do well in the long term. You can invest in good equity mutual funds that too at a low price. Expect to get good returns, from your equity mutual funds, in the long term. You need to be extra careful in this step because make sure that the Stock Investment Company is SEBI approved. This would encourage the foreign investors for investment in the Indian Stock Market industry. The fact that the Indian Stock Market would be growing by leaps and bounds in future due to this demonetization scheme, the foreign industrialists would be highly encouraged to invest in the shares, stocks and mutual funds to get higher returns on their invested money. Should you consider tax free bonds? You can invest money in tax free bonds, which give 6% return, with no lock-in period. If you are falling in the higher tax bracket, this is an excellent investment opportunity. Interest you earn on tax free bonds, is not taxed. There will be lot of companies that would be trying to come into the industrial picture. This would lead to the expansion of the share market. The reason being that there is less rate of interest for loans offered by the banks. As a result, small entrepreneurs and enterprises and medium scale industries and factories would be having an upper hand in this demonetization scheme positively affecting the share market. Land purchase has the highest component of share in unaccounted money. There is a cash component of 20-30 per cent in property transactions, largely due to the difference between the collectorate rate and market property rate. Demonetization will surely affect this. As a result, stock market investments will increase lead to the strengthening of the economy.

3. Demonetization scheme probably impacts the least on stocks in this sector but still its plays a significant role in the Indian stock market and its analysis. IT Sector get most of the revenue from Forex and secondly, they get maximum benefits via banking channels. Expect this sector to do well. In the race for cashless transactions and other anti-corruptive measures taken by the ministry, the e-banking would get encouragement and would be beneficial to common public as well. So put up your socks and get ready for this new revolution. Be wise, Get rich. Author Bio: Indices master is extremely prominent when it comes to the service they provide. They are considered as one of the most successful advisor for trading in stock market with having a great experience. Indices Master is a SEBI approved investment advisor.