1.

Unawareness :

Many people are unaware towards stock investing. They do not know how much returns they can get
by investing in the stock market. A common villager doesn’t know how to earn from stocks and
doesn’t understand the power of compounding. A local retail shop owner does not know what is a
demat and trading account. An old small town electrician hasn’t ever met an investor or trader in his
entire life. This is all because of lack of awareness. In short, unawareness is one of the biggest reasons
why most Indians do not invest in stocks.

2. Myths in Indian stock market :

Since childhood, everyone hears about how his uncle/cousin/neighbor etc who has lost his entire
fortune in the stock market. Stock market investing is considered as gambling in India.
Many people do not invest in the market because they follow the famous investing myths prevailing in
the society.

Few of the famous stock market myths which stops a common person from investing in stocks are:

● Investors who invest on their own are intelligently gifted.

● Paying a profession is better than making your own investing decisions
● Investing on your own is very risky etc.

3. Risk Aversion:
The risk is always involved in 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 considers 4% return from the savings account as safe. They will only
invest if they are assured that their investment is 100% risk-free, which stock market never is. The
risks involved in the market stops these people from investing in stocks.

4. Financial Illiteracy:
There is also a segment of people who are willing to invest in the stock market but are unable to invest
because of lack of knowledge or proper guidance. They do not know where to start. There is no proper
platform for these people to learn about stock market investing. Lack of knowledge about the stock
market stops these segments of people from investing in the Indian stock market.

5. No security of investors’ money in exchanges:

There are a number of past scams in the market. The Indian stock market has got a bad name due to
scandals like that of​ ​Harshad Mehta and​ ​Ketan Parekh. An Even big company like ‘SATYAM’ was
involved in frauds and looting their investors. Although after coming to SEBI (Securities Exchange
Board of India), these scams numbers have reduced. However, there are still many fraudsters present
in the Indian market who tends to make money by cheating innocent investors. Because of the lack of
proper security measures in the market, many common people tend to stay away from the market. And
this is one of the key reasons why most Indians do not invest in stocks.

6. No proper courses about investing:

There are very few dedicated courses on the stock market. Although NSE and BSE provide few
certificate courses, that’s not even close to fulfilling the requirements of the interested aspirants. Even
many MBA, BBA, or BCOM degrees don’t have proper courses on investing/trading.

7. Lack of capital:
In 2012, the Indian government stated that 22% of Indian population is below its official poverty
limit. The latest poverty line is targeted at Rs 32 in villages, Rs 47 in cities. When a majority of the
population are struggling to meet even the basic needs of life, then it's logical that the percentage of
people with surplus cash to invest will be low. Lack of capital is a major reason why most Indians do
not invest in stocks.

8. Unwillingness:
“I don’t have time”​ – a common statement among the 9-to-5 working people in India, unwilling to
take charge of their financial future. A majority of the population are either too busy in their day job
or are ignorant towards investing. They always delay investing in the market, considering they will do
so in the future. This unwillingness or laziness among the people is a big reason for less participation
of Indians in the stock market.

9. People like physical assets in India:

People still have a love for gold, lands, FDs etc. Many people consider investing in Real Estate, gold
etc easier in India compared to paper assets, as this has been traditionally followed. Investing in a land
in your village, or buying gold jewelry from your local jeweler shop seems simple compared to
opening a trading account which will further require the access to internet, computers etc. The natural
tendency of Indians towards physicals assets is a big rationale for poor participation in the stock
market.

10. Lack of accessibility:

11. Improper way of investing:

There are many people who enter the market just to try their luck. Once these people lose money in
stocks, they practically leave the market forever. These inappropriate ways of investing reduce the
total number of active investors/traders in India.

12. Volatility:
1. Ignorance :

Many individuals are not aware about stock investing. They don't have the slightest clue about how
much returns they can get by putting their savings money into the securities exchange. They don't
have the any idea about how to make money from stocks and don't know how it can change their
lives. Some people even don't know what is a demat and trading account. An old community circuit
tester hasn't ever met a financial specialist or merchant in all his years. This is all a result of absence
of mindfulness. So, ignorance is one of the main motivations why most Indians don't put resources
into stocks.
2. Fantasies in Indian financial exchange :

Since adolescence, everybody finds out about how his uncle/cousin/neighbor and so on who has lost
his whole fortune in the financial exchange. Financial exchange putting is considered as betting in
India.

Numerous individuals don't put resources into the market since they pursue the renowned putting
fantasies winning in the general public.

Maybe a couple of the popular financial exchange legends which prevents a typical individual from
putting resources into stocks are:

Financial specialists who contribute without anyone else are brilliantly talented.

Paying a calling is superior to settling on your own contributing choices

Contributing without anyone else is dangerous and so on.

3. Hazard avoidance:

The hazard is constantly engaged with financial exchange regardless of what number of studies you
have done and how in a general sense solid the organization is. The greater part of the preservationist
Indians are not willing to go for broke on their well deserved cash and considers 4% come back from
the bank account as sheltered. They will possibly contribute on the off chance that they are guaranteed
that their speculation is 100% hazard free, which securities exchange never is. The dangers associated
with the market prevents these individuals from putting resources into stocks.

4. Budgetary Illiteracy:

There is likewise a fragment of individuals who are happy to put resources into the securities
exchange yet are unfit to contribute in view of absence of information or legitimate direction. They
don't have a clue where to begin. There is no legitimate stage for these individuals to find out about
securities exchange contributing. Absence of information about the securities exchange prevents these
fragments of individuals from putting resources into the Indian financial exchange.

5. No security of speculators' cash in trades:

There are various past tricks in the market. The Indian financial exchange has a terrible name because
of embarrassments like that of Harshad Mehta and Ketan Parekh. An Even huge organization like
'SATYAM' was associated with cheats and plundering their speculators. Albeit subsequent to coming
to SEBI (Securities Exchange Board of India), these tricks numbers have decreased. Be that as it may,
there are as yet numerous fraudsters present in the Indian market who will in general make cash by
swindling blameless financial specialists. In light of the absence of appropriate safety efforts in the
market, numerous average citizens will in general avoid the market. Furthermore, this is one of the
key reasons why most Indians don't put resources into stocks.
6. No appropriate courses about contributing:

There are not many committed seminars on the securities exchange. In spite of the fact that NSE and
BSE give few endorsement courses, that is way off the mark to satisfying the necessities of the
intrigued hopefuls. Indeed, even numerous MBA, BBA, or BCOM degrees don't have legitimate
seminars on contributing/exchanging.

7. Absence of capital:

In 2012, the Indian government expressed that 22% of Indian populace is beneath its official
neediness limit. The most recent destitution line is focused at Rs 32 in towns, Rs 47 in urban areas. At
the point when a dominant part of the populace are attempting to meet even the fundamental needs of
life, at that point it's consistent that the level of individuals with surplus money to contribute will be
low. Absence of capital is a noteworthy motivation behind why most Indians don't put resources into
stocks.

8. Reluctance:

"I don't have time" – a typical explanation among the 9-to-5 working individuals in India, reluctant to
assume responsibility for their monetary future. A dominant part of the populace are either
excessively occupied in their normal everyday employment or are unmindful towards contributing.
They generally postpone putting resources into the market, considering they will do as such later on.
This reluctance or lethargy among the general population is a central purpose behind less interest of
Indians in the financial exchange.

9. Individuals like physical resources in India:

Individuals still have an adoration for gold, lands, FDs and so forth. Numerous individuals think about
putting resources into Real Estate, gold and so forth simpler in India contrasted with paper resources,
as this has been generally pursued. Putting resources into a land in your town, or purchasing gold
gems from your neighborhood gem specialist shop appears to be basic contrasted with opening an
exchanging account which will further require the entrance to web, PCs and so on. The common
propensity of Indians towards physicals resources is a major method of reasoning for poor interest in
the financial exchange.

10. Absence of openness:

11. Ill-advised method for contributing:

There are numerous individuals who enter the market just to attempt their karma. When these
individuals lose cash in stocks, they for all intents and purposes leave the market until the end of time.
These unseemly methods for contributing decrease the all out number of dynamic speculators/brokers
in India.

12. Unpredictability:
PRINCIPLES OF INVESTMENT
Five basic principles
:serve as the foundation for the investment approach. They are as follows.

1.​ Focus on the long term:

​

There is substantive empirical evidence to suggest that equities provide the maximum risk
adjusted returns over the long term. In an attempt to take full advantage of this phenomenon,
investments would be made with a long term perspective.

2.​ I​ nvestments confer proportionate ownership

The approach to valuing a company is similar to making an investment in a business.

Therefore, there is a need to have a comprehensive understanding of how the business
operates.

3.​ M
​ aintain a margin of safety

The benchmark for determining relative attractiveness of stocks would be the intrinsic value
of the business. The Investment Manager would endeavor to purchase stocks that represent a
discount to this value, in an effort to preserve capital and generate superior growth.

4.Maintain a balanced outlook on the market

The investment portfolio would be regularly monitored to understand the impact of changes
in business and economic trend as well as investor sentiment. While short-term market
volatility would affect valuations of the portfolio, this is not expected to influence the
decision to own fundamentally strong companies.10
5.Disciplined approach to selling

The decision to sell a holding would be based on either the anticipated price appreciation
being achieved or being no longer possible due to a change in fundamental factors affecting
the company or the market in which it competes, or due to the availability of an alternative
that, in the view of the Investment Manager, offers superior returns.