#6 Reasons Why Most Indians Do Not Invest In Stocks
When Mr. Narendra Modi was elected Prime Minister of India in May 2014, the entire country erupted in applause, including the financial market. Since PM Modi’s appointment to the federal government, the NSE index nifty has returned an incredible 110 percent.
Although the stock market greeted our PM with a favourable trend, it did not appear to stimulate ordinary people to participate in the online stock investment in India as much as expected.
Around 98 percent of India’s population has no investment in stock market in India . Only about 2% of the Indian population participates in the stock market, with Gujarat and Maharashtra accounting for the majority of the 29 states.
When we look at the percentage of ordinary people that participate in the investment in share market in india market around the world, we can see that India’s participation rate is even lower than the global average. In China, roughly ten percent of the population invests in the stock market. Furthermore, in the United States, this rate is as high as 18%.
What concerns Indian investors the most, though, is the market’s lack of growth. The present percentage of investors engaged in the market is the same as it was three decades ago (in the 1990s). The stock trading brokers in India,regulatory agencies and the Indian stock trading platforms have not been exceptionally successful in attracting additional retail investors to the equities market.
Even though the Indian stock market is almost 140 years old, individuals continue to look for reasons why most Indians do not invest in stocks. We’ll go through six common reasons why most Indians don’t invest in equities in this piece and find out why online stock investment in india is not as impressive as it could have been –
Lack of awareness
Many people aren’t aware of the benefits of stock investing. They have no idea how much money they can make if they invest in the stock market. A typical villager has no idea how to profit from stocks and is unaware of the power of compounding.
Not willing to take the risk
A certain amount of risk is always involved in the stock market no matter how many studies you have done and how fundamentally strong the company is. Most of the conservative Indians are not willing to take a risk on their hard-earned money and consider a 4% return from the savings account as safe. They will only invest if they are assured that their investment is 100% risk-free, which the stock market never is. The risks involved in the market stop these people from investing in stocks.
No proper courses
There are only a handful dedicated stock market courses available. Despite the fact that NSE and BSE provide a limited number of certificate courses, these do not come close to meeting the needs of those who are interested. In fact, the MBA, BBA, or BCOM degrees do not always have the proper courses on investing/trading which is why there’s little confidence in investing for the stock market.
Lack of capital
According to the Indian government, 22% of the Indian country’s population is below the official poverty line. In rural areas, the latest poverty threshold is Rs 32, whereas in cities, it is Rs 47. When the bulk of the population is suffering to fulfil even basic requirements, it’s only natural that the fraction of people possessing money to invest will be quite small.
“I don’t have time,” say many 9-to-5 employees in India who are unwilling to take control of their financial fate.
The bulk of people are either too preoccupied with their day jobs or oblivious to the importance of investing. They always put off investing in the stock market, assuming they would do it later. The reluctance or laziness of the population is a major reason for Indians’ low stock market involvement.
More keen towards physical assets such as gold or land
People still have a thing for gold, land, and mutual funds, among other things. Many people believe that investing in real estate, gold, and other precious metals is easier in India than investing in paper assets, as this has long been the case.
Many people go into the market solely to test their luck. Once these folks have lost money in the stock market, they are basically out of the market for good. The entire number of active investors/traders in India is decreasing as a result of these ineffective investment strategies.