The stock markets are on a roll right now with Sensex touching 9700 yesterday. Everyone talks of "Sensex touching 10000", "huge earnings growth", "India's time has arrived" etc. Among all this hype and hoopla, what has been conveniently ignored is that there is very little retail participation in the markets. I read somewhere that only 2% of the total retail (house hold) savings are invested in stocks.
The reasons for this is not difficult to find. In my opinion, there are mainly two reasons:
- Ignorance of what a stock is, what it represents and how the market operates. Well, the ignorance is not limited stocks alone – it extends to almost all avenues of investment.
- A lack of true information – fundamental research, latest company information and basic tools that will help an investor.
It is only when the world of investment – be it stocks or mutual funds (Real estate, government bonds, gold and bank deposits do not count – we Indian’s “invest” too much in them) is made accessible to common man thorough proper investment education and there are reliable channels of information will the retail participation in the markets grow.