For decades, millions of Indians have been told that the stock market is the best way to build long-term wealth. But veteran investor and market commentator Shankar Sharma has a completely different message: retail investors should stay away from equities altogether.
In a recent interview with a TV channel, Sharma made a startling claim that goes against conventional investing wisdom. According to him, equity markets are "meant for big boys and professionals" and not for ordinary retail investors.
"My view is equity markets are meant for big boys and professionals. They're not meant for Mr. Joe on the street because the data does not support equity investing for the retail investor," Sharma said.
The veteran investor argued that even if an investor manages to earn 10-12% annual returns from stocks, taxes and market volatility significantly reduce the actual benefit. Once capital gains taxes are deducted, returns fall further, he said. When adjusted for the high volatility associated with equities, Sharma believes the risk-reward equation becomes unattractive.
He compared stock investing with fixed deposits, which he says offer something many investors underestimate — peace of mind.
"You cannot on a risk-adjusted basis beat even a fixed deposit," Sharma said, noting that bank deposits provide both return of capital and return on capital, while equities expose investors to uncertainty and market swings.
What makes Sharma's stance even more unusual is that he claims to have followed it consistently for over three decades.
"That's what I've always believed for 35 years," he said. "All my relatives and friends have pestered me over decades, and I've told them, 'Khabardar, kabhi bhi mat karna equity mein kabhi' (Beware, never ever invest in equities)."
