Rakesh Jhunjunwala is one of the most successful and popular investors in India. He started earning through the stock market while he was still in college through trading with just ₹5000 in 1985 when the Bombay Stock Exchange Index was at 150.
After completing graduation, he pursued Chartered Accountancy. He’s a billionaire today, having a net worth of $3 billion, making him the 48th richest man in India.
Mr. Jhunjhunwala has invested in stocks like Titan, CRISIL, Jubilant Life Sciences, NCC, Aptech Limited, Ion Exchange, MCX, Fortis Healthcare, Lupin, VIP Industries, Geojit Financial Services, Rallis India, Aurobindo Pharma, Praj Industries.
Out of these, his most valuable listed holding is Titan, part of the Tata conglomerate.
A lesser-known fact about him is that Mr. Jhunjhunwala has backed a new, low-cost airline, Akasa Air.
He is a movie buff and has co-produced several Bollywood films. He has also invested in Metro Brands through his wife Rekha Jhunjhunwala. She holds 14.40 percent stake in the footwear company.
Like any other successful person, Rakesh has also gone through a long journey to reach this point in life. A lot of people in India look up to him now for investing advice.
To ease out your task, we have listed the top 5 investing advice from the money magnet himself, Rakesh Jhunjhunwala.
Long term investments
Mr. Jhunjhunwala, just like most top investors, believes in long-term investing. He believes it is essential to give your stocks the time and space to grow at their own pace.
Long-term investments help your stocks to come out safe from market volatility over time. Being a long-term investor shields you from many uncertainties of the markets.
Sometimes one sees the market crashing and starts selling all his stocks in huge losses without following any exit strategy or analysis. In long-term investments, you should stick with the company’s highs and lows to create wealth, if your investment rationales were correct.
Invest in Mutual funds
Investing in Mutual funds is a safer way to invest your money at a comparatively lower risk than directly investing in stocks. It helps you invest your money in not one company but a group of companies.
Mr Jhunjhunwala believes in investing in mutual funds as expert professionals manage them. Having a reference profile always helps you make smart financial decisions.
The most important advantage of mutual funds is the fact that they do not let your money be invested in the fate of one particular company. In mutual funds, your money is distributed across different companies from different industries.
Hence even if a company goes down, it has the other company’s profit to average it out.
No Emotional investments
Sometimes we tend to hold on to stocks or invest in stocks just because of our emotional investment in the companies. We need to have technical knowledge, past performance analysis, and a good view of the present situation of the market as well as the company.
One more example of emotional investments is to buy the dip without the knowledge of the market or buy multiple stocks just by listening to the people around that the market is good.
Patience is the key to success; hence, buying/selling stocks just by emotional power isn’t the right thing.
Mr. Jhunjhunwala didn’t become a money magnet in one day. It takes time and patience for things to build. Hence, we need to have patience and take our time to analyze the market before making any rash decisions.
Analysis is Important
Rakesh Jhunjhunwala trading tips include that analyzing the market is the most crucial step of investing. Mr. Jhunjhunwala advises you to have proper research on the stocks you want to invest in. Research on cash flow statements, balance sheets, fundamental analysis, etc. is necessary while investing.
Mr. Jhunjhunwala also believes that knowledge is the biggest asset in the stock market. In his own words, the market is about money, but at the same time, it is also about knowledge and getting the correct terms of knowledge.
Therefore it is crucial to know the company and the market.
Vadhaare vadhaare levanu, ghataare ghataare bechvanu
Mr. Jhunjhunwala believes to buy stock in an uptrend and sell a stock as soon as it starts going down. The first thing he analyses is the direction of the market.
So, vadhaare vadhaare levanu means buying such a share that is in an uptrend and ghataare ghataare bechvanu means selling a share when it seems to be going in the downtrend.
It’s correctly said that “Strike when the iron is hot.” So if the share is in the uptrend the momentum will also be an uptrend and you get a buy signal again for the second time then he starts pyramiding there meaning he starts accumulating the shares there. This is one very unique piece of investing advice from Rakesh Jhunjhunwala.
After going through all these Rakesh jhunjhunwala tips, we can conclude that he believes in investing in well-researched companies.
He has created strategies over the years which work the best for him. Also, he believes in long-term investing and keeping patience while investing.
For trading, he believes to have a well-thought-out strategy that one sticks to and does not work emotionally for decisionA lesser-known fact about him is that Mr. Jhunjhunwala has backed a new, low-cost airline, Akasa Air.