The Importance of Equity in India

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Summary

Here’s a short article on the perception of equity, how to start if you are a beginner and my story. This article has also been published on Indiamanthan – LINK

Perceptions

Ask 10 persons about their opinion of the Indian share market, and you will get the following responses:

  • Gambling
  • Losses
  • Waste of time
  • Risky
  • Bad advice and analysts

Just a few may say something positive

  • Steady profits
  • Retirement fund
  • Right way to grow wealth
  • Fight inflation

India is a country that is seeing a lot of change. Its visible in our cities, in our communication networks, and most of all, in the attitudes and thinking of people.

About 300 years ago, India was the richest country in the world. Then came a few wars, the British and Europeans, and a post independence Socialist regime. Its only in the last 20 years that India is getting a taste of what it’s been missing.

Freedom to work, freedom to earn, to live on our terms, to take pride in what we have. The Rest of the World is not to be blindly admired and coveted. They had their time in the sun. Now is our chance to be as good or better.

The Reality

The Indian Equity market has been through many phases over the last 30 years. But without a doubt, I will say that today Indian equity market s and platforms are among the best in the world in terms of transparency, low manipulation, low costs of transactions and efficiency.

So today, they represent much better the Indian economy, the industry, enterprise and the aspirations of Indians.

People have been hurt and burned in the past. But its time to learn the important lessons. And realize that if handled properly, the equity market is the most important Wealth creation asset for Indians today.

I realized this in my 10 year journey from a novice to a professional equity and portfolio analyst.
It’s a lot like fire. It can harm and burn you. But if controlled and used with safeguards, it can help cook your food everyday.

Here’s my suggested path

  • Your journey in Equities has to start with signing up with a brokerage and opening a demat account.
  • Your first investing experience may be in equity Mutual Funds
  • Next re-look at the companies you know. Where did your dad or uncle work? Are these good companies? Which branded products do you like? Are the companies that made them listed?
  • Take a close look at these firms. Or other good firms you know of.
  • Invest small amounts in them. Money that you don’t mind losing if your experiment fails.
  • Watch the firms over months. Read about them in the papers. See their results. Try to understand them better.
  • Some equity investments will give you profits. Others losses. Always try to learn important lessons. Build on the successes. Exit losses if the firms do not perform over a period. Build your own investing confidence and sense slowly.
  • Try not to blindly believe everything you read or hear.
  • Success in your personal investments will follow.

My Experience

This is how I went about my learning curve. But in my case, I was able to not just get investing success, but actually developed a passion for it.

I now publish equity research on my website, www.jainmatrix.com, and provide portfolios for investors to buy. As an equity and portfolio adviser, my firm JainMatrix Investments supports investors through their learning and investment cycle.

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