Why do Retail Investors are always out of the Markets?

POSTED BY Ramesh ON August 18, 2011 3:55 pm COMMENTS (2)

I watch the business news channels quite frequently (for entertainment, of course). It always surprises me when the anchors and the experts say that the Retail Investors have not participated or joined in. When the markets are rising, they (retail investors) remain on the sidelines since they have missed the bus. When the markets are falling, they, again, remain on the sidelines for fear of losing money in such a bad environement, etc.

Is there a remedy for that? Why do retail investors do that? And is this an Indian phenomenon or is it worldwide?

Please share your thoughts.

2 replies on this article “Why do Retail Investors are always out of the Markets?”

  1. I think what people say is correct and the biggest reason is retail invesors have no focus on long term equity investing and most of them dont even undestand it , they have no patiance to leave their money in equity for 5-10 yrs . all they want is 3 month , 6 months or max 1 yr to do soemthing magic to their money .

    I think 99% of retail public is like that only . The issue lies on the retial investor side .

    Manish

  2. bharat shah says:

    i think, first i should be clear that other than retail investor, other would be institutional. now institutes may be mutual funds, foreign institutes (including mfs), investment companies , and other companies having surplus cash to invest. the list could be longer than i know! but what i am thinking, that the mutual funds invest on behalf of mostly retail investors. i think what you stated , is not confined to india, but it is world phenomenon, here the retail investor means who are directly investing, not through mfs. i think, in developed world,mf investment by the investor is great portion of their investment. i think, it should be like that, because the retail investor, as a class, could not have expertise as well as access to large information required for equity investment.so for most of them , equity mf investment is better option.

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