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Though India is one of the fastest-growing economies in the world we are not getting enough benefit from this development. Government is taking a lot of measures to boost the economy and trying to bring foreign investment in India. As a result, a large number of foreign investor is investing in Indian Share Market and getting benefit from our developing economy.
A study shows that more than 50% of the population of the USA invests in share market but in India, this number is only 4%. Even after so many years of Independence, we are discussing why people are not investing in the share market. A major portion of investment in share market come from Maharashtra. Foreign investors invest in Indian Share market and gain from our growth. But we Indians are losing this opportunity.
Although there are multiple reasons why people are not investing in the share market. Few of the reasons are mentioned below:
Lack of Awareness:
Most of us don’t know what share market is. More than 60% of Indian population resides in the rural area. A farmer from a rural area never know what is share market and how can he earn by investing in shares. Even many educated people are unaware of the share market. Most individual who invests in share market is either highly educated or investors. Many people don’t know what is Demat account, what is share, how the share market works, how to purchase a share of a company.
- Common investing Myths
Most of us have heard that Sharmaji lost his hard-earned money in share market or any of our relatives lost his wealth. We are being taught that the share market is gambling and we can become rich only by luck.
Is it true?
Yes, a lot of people have lost their hard-earned money in the share market and still many are losing. The reason is not that they were unlucky; the reason is that they invest their money without doing any research. We want our money to be doubled in share market. But we forget that the share market is just like other business. It also needs research, patience and time to create wealth.
- Better alternative available
There is a lot of investment alternative available. We get a 6%-7% return in fixed deposits. NSC, PPF is also giving a decent return. Even debt fund gives a return of almost 10%-12% On the other hand mutual fund and share investment can offer more than 15% -20% return but it comes with risk. That is why people don’t want to invest their money in share market rather they invest their money in other alternatives which offer lower return but their money are safe.
- Lot of Scams:
The Indian Share market has witnessed a lot of scams. Harshad Mehta scam, Kethan Parekh scam etc. Because of these scams, investors lost their money and faith in the share market. After SEBI come into power these scams have reduced but not completely stopped. These scams affect so much that people still afraid of investing in the share market.
- Lack of Capital:
A large portion of the population struggle for their daily basic needs. Their income is so low that they are unable to make both ends meet. We cannot expect a person to invest a single paisa in the share market who struggle to provide basic needs to their children. Nowadays SIP is gaining popularity among middle-class people but because of limited income, people invest a very little amount in these SIPs.
- No Cources:
There are multiple courses in India but no course of share market. Our teacher teaches how to score better marks and get a good job. Getting a decent job becomes a major agenda of the Indian Education System. Our education system doesn’t teach us how to become a job creator and how to make our money work for us.
- Not willing to take risk:
Share market gives a higher return than any other investment but it comes with higher risk. There is a simple theory “higher the risk, higher the return”. We want our money to grow but don’t want to take any risk.
- Lack of patience:
Indians lack patience when it comes to the share market. We want our money to be doubled in one night. Lack of patience always results in entering or exiting at the wrong time. As a result, people lose their money.
- Past Experience:
If a person lost his money in the share market because of any reason he tends to remain far from the share market. Instead of finding the reason for failure, the investor will find other investment options.
- Word of advice:
Our elders advised us to keep the distance from the share market. They tell us that share market is a risky investment and you will lose your money if you invest in shares. Instead of making the investment in share market, they motivate us to invest in other safer investment options. This keeps most youngsters away from share market.
- Volatility in Share Market:
Volatility is one of the major reason because of which people avoid investing in share market. Share market is so much volatile and unpredictable that no one can guarantee what will happen in other few second. Some people earn from this volatility while major especially small investor lose their money. If you are new in the share market then keep yourself away from those shares
Disclaimer: Share market is not gambling. No doubt many people lost their money in the share market but there are people who become successful because of investment in the share market. Investment in share market requires research, study, patience and right timing. No person can earn here by luck only. If you do your research carefully, pick the right stock at the right price, have the patience to bear volatility, don’t make investment decisions on rumours or tips then, in the long run, you will get the benefit of rising Share Market.