by5paisa Research TeamLast Updated:Dec 09, 2022 - 09:20 pm186.2kViews
Indians have a love-hate relationship with the stock markets. Research shows that only 2% of the Indian investors invest in the stock markets. The average person’s view on staying away from stocks is because the equity markets have not been able to guarantee the same level of trust that other forms of investment provide (read: fixed deposits). Moreover, financial illiteracy prompts investors to prefer traditional methods of investment that give sure shot returns. Other reasons could be:
Reasons For Staying Away-
- Financial Illiteracy
Having little or no knowledge about the stock markets keeps investors away from it. The common belief that “it is a place where you invest only to lose” should be cast away. Education in commerce has also failed to give proper insights and gain the trust of investors.
- Lack Of Money
Lack of money often keeps investors away from the stock markets. It is a common belief that investing in stocks requires huge money. However, you can start with small amounts too provided you do your research and then invest in a stock.
- Patience
Indians lack patience when it comes to the stock markets. Most believe that it is a place to make quick money. Lack of patience usually results in investors either entering or exiting a trade at the wrong time. Such premature decisions mostly end up against the investors.
- Traditional Investments
Compared to the stock markets, traditional method of investments like bank FDs, certificates, and gold give sure shot returns. People do not have the time to study a stock and invest accordingly. So investing in traditional, risk-free instruments is preferred by most of India’s middle-class population.
- Past Experience
If an investor has suffered losses in the stock markets because of wrong investments in the past, they would generally tend to keep away from it. Instead of analyzing the reasons for failure, the investor will find it safer to keep away and make investments in another form.
- Lack Of Courage
Because of a fear of losing money, investors do not show courage while making investments in stocks. Also, the “bad” stock market experiences of people near to us are a big demotivation.
- 'Play Safe’ Attitude
When it comes to investments, the risk appetite of Indians is not that high. Therefore, fixed deposits are the sure-shot, go-to bets for most Indians despite the stock market giving higher returns.
- Word Of Advice
Elders in India like to guide and motivate their young ones about investing money. However, they are also unable to comprehend the stock markets and, hence, are cautious about investing there. According to them, it is not a safe place to invest one’s hard-earned money. This keeps most young investors away from the stock markets.
Today, there is a big disconnect between the Indian stock markets and the Indian investors. The reason for this is lack of awareness, anxiety about risk, high returns, and a need for risk-free investments that give stable returns. This affects investors’ earning capabilities and the benefits that they can reap in the long run.
How do you rate this blog?
Submit Rating
View All
Start Investingin5 mins*
Rs. 20 Flat Per Order| 0% Brokerage
About the Author
Our research team is composed of some highly qualified research professionals, their expertise range across sectors.
Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to
By proceeding, you agree to the T&C.
Latest Blogs
Market Outlook for 02 April 2024
After the extended weekend, Nifty started the new financial year on a positive note and it registered a new record high of 22530. The index then consolidated within a narrow range throughout the day and ended below 22500 with gains of six-tenths of a percent.
- Apr 01, 2024Read More
Aspire & Innovative Advertising IPO Allotment Status
Building blocks of the Aspire & Innovative Advertising Limited Ltd IPOAspire & Innovative IPO is a book built issue of Rs 21.97 crores. The issue comprises entirely a fresh issue of 40.68 lakh shares. Aspire & Innovative IPO opens for subscription on March 26, 2024, and closes on March 28, 2024. The allotment for the Aspire & Innovative IPO is expected to be finalized on Monday, April 1, 2024.
- Apr 01, 2024Read More
SRM Contractors IPO Allotment Status
Building blocks of the SRM Contractors Limited Ltd IPOSRM Contractors IPO is book built issue of Rs 130.20 crores, comprising entirely of fresh issue of 0.62 crore shares. SRM Contractors IPO opens for subscription on March 26, 2024, & closes on March 28, 2024. Allotment for SRM Contractors IPO is expected to be finalized on Monday, April 1, 2024. SRM Contractors IPO will list on BSE & NSE, with tentative listing date fixed as Wednesday, April 3, 2024.
- Apr 01, 2024Read More