Anish Dhopeshwarkar
After the declaration of the opinion polls post elections ended for the LS, Sensex for the first time crossed the 40,000 mark and Nifty 12,000 mark. Almost all of the major newspapers carried this news of phenomenal jumps of the equity markets and a new topic was introduced for the chai pe charcha discussion at local tea stalls couple of days of “how investing into stocks would reap anomaly in terms of monetary benefits.
Investing in the financial markets was always a taboo topic in average middle income families. Being averse to risk, Fixed deposit was favourite instrument of investment of our fathers. Those who were slightly more far sighted, and had a little extra knowledge went ahead with Reliance, Infosys, Wipro, and TATAs the backbone of our modern economy. But things began to change post 1991, with end of License-Quota raj the markets were flooded with flourishing companies luring investors with promises of “double returns”. And those who had anticipated this “capitalisation” systematically saw their wealth grow in multiples of 2.
Then came sharks like Harshad Mehta, who eroded the markets and the wealth of thousands of small investors and again people’s mentality changed from “Stock markets are good sources of investment” to “You lose money if you invest in markets”. Government swiftly responded with establishment of SEBI and NSE for facilitating free and fair trading practices and protect individual investors, but it took a long time for middle class Indians to change their outlook towards the markets.
Fast forward to the 21st Century, where Internet has facilitated millions of small investors to take up investing sitting inside the comfort of their homes and in this new flood of investors there are many who enter this dogfight without checking their oil. There are about 6,600 companies listed on both the markets combined, and for a newbie it becomes choosing between the devil and the deep blue sea in deciding where to invest? Many turn to their friends for (mis)information and end up losing money. Some prefer to go to some investing consultancies who charge interest, for advices and some resort to the safe way of Systematic Investment Plan (SIP)and Mutual Funds (MF).
Earning a pile of profits is not as easy as shown in wolf of wall street or Bazzar, where young graduate starts working for a hotshot investment banker and becomes crorepati in no time. It takes dedicated market research, months of analysis, to come up with some decision and inspite of all that one policy change by Government, or some externalities applied all of these can go in vain. So, new investors remember before you enter the field make sure you are suitably dressed up or you’ll end up loosing the game.
