1. More awareness <\/strong>and easier entry<\/strong><\/h3>\n\n\n\nOne of the main\nreasons for the increase in the retail investor base can be attributed to an\nincrease in awareness about the stock markets. In fact, Upstox, one of the many discount brokers\nin India, reported that about 80% of its total customer base acquired during\nthe pandemic period came from Tier-2 and Tier-3 cities. This data point\nstrongly suggests an increase in the penetration of share trading and the stock markets. <\/p>\n\n\n\n
Also, with the\nintroduction of eKYC and Aadhaar eSign, almost all stockbrokers have adopted\nthis methodology. This has made the trading and demat account opening process\nvirtually paperless and completely online, making the entry into share trading\nsmooth and seamless. Additionally, the many incentives and discounts provided\nby brokerages have also played a major role in attracting a sizable retail\ninvestor population. <\/p>\n\n\n\n
2. Market crash and bottom fishing<\/h3>\n\n\n\n
The recent stock market sell-off in\nMarch 2020 set off a sort of a frenzy amongst the investor population. Almost\nall the sectors, industries, and companies faced a significant drop in their\nmarket value. Both the major Indian indices, Sensex and Nifty, dropped by\naround 30% in a matter of a few trading sessions. <\/p>\n\n\n\n
Many retail investors perhaps\nthought that by entering when the market was bottoming out, they could enjoy\nsome short-term gains when the markets finally went on a rise. This led to a\nhuge wave of new and first-time traders flooding the market and trying their\nhand at bottom fishing. Even penny stocks were not spared, with many such\nstocks experiencing a never before rise in their stock prices. <\/p>\n\n\n\n
Additional Read: <\/strong>Here are some Investment Tips by Experts for Post-pandemic World<\/a><\/p>\n\n\n\n![\"Reasons](\"\/wp-content\/uploads\/2020\/09\/economic-crisis-2-min.jpg\")
<\/figure>\n\n\n\n3. Retail investors getting out of busy schedules<\/h3>\n\n\n\n
Nations around the\nworld, including India, were forced to adopt stringent measures to combat the\nspread of coronavirus. One such measure was the string of widespread lockdowns\nthat literally forced people to stay indoors for months. With almost the entire\nworking population working from home, their schedules were not so busy anymore.\n<\/p>\n\n\n\n
They suddenly had\nmore time on their hands and consequently tried to put it to good use by\ngetting in on some of the stock\nmarket action. Hordes of retail investors took out a part of their savings and tried\ntheir hand at share trading. This ultimately led to a record number of trading\nand demat account openings in the history of stock markets. <\/p>\n\n\n\n
4. Retail investors looking for alternative sources of income<\/h3>\n\n\n\n
As a consequence of\nthe widespread lockdowns, many businesses were forced to suspend their\noperations and had to suffer serious setbacks. This directly impacted the\nrevenues of many individuals who had to contend with little to no remuneration\nduring this phase. Some of them suddenly found themselves laid off and without\na job. <\/p>\n\n\n\n
Under such dire\ncircumstances, many such individuals turned to the stock market looking for\nalternative sources of income. The increase in retail investor participation in\nthe month of June 2020 is in itself clear evidence of the rise in the retail\nand high networth individual investors\u2019 share in the stock market. <\/p>\n\n\n\n
5. Weak returns from other investment options <\/h3>\n\n\n\n
In the current\neconomic scenario, the returns offered by many traditional investment options,\nbarring gold, have been very lacklustre. The bank interest rates are quite low\nand the real estate sector is struggling to get back on its feet. Considering\nthese circumstances, more number of individuals have turned to the stock\nmarkets in the hopes of generating some short-term profits to satisfy their\nfinancial goals. This has led to a boom in the number of retail investors in the\nstock market. <\/p>\n\n\n\n
Additional Read:<\/strong> Corporate Loan restructuring. Will it be a Boon or a Bane for the Economy?<\/a><\/p>\n\n\n\nConclusion<\/strong><\/h2>\n\n\n\nAlthough there is a strong increase in retail investor participation in the stock market as of late, it still remains to be seen whether this trend would continue further. As the country and the economy slowly recovers, there\u2019s a slight chance of these investors moving away from the stock markets and onto the more traditional investment options. But, for now, retail investors are here to stay. <\/p>\n\n\n\n
In uncertain times like these, safeguarding your wealth is as important as earning new returns. So, if you seek customized and expert guidance on how to secure your finances during the current economic crisis TATA Capital\u2019s wealth management solutions<\/a> are just what you need. Our team of expert wealth managers will help you find the investment strategy that\u2019s best suited to your financial goals and help you choose the right investments across a variety of options.<\/p>\n","protected":false},"excerpt":{"rendered":"Historically, during times of economic crises and recessions, investors from the retail and institutional categories have always shied away from investing in the stock markets. <\/p>\n
<\/figure>\n\n\n\n3. Retail investors getting out of busy schedules<\/h3>\n\n\n\n
Nations around the\nworld, including India, were forced to adopt stringent measures to combat the\nspread of coronavirus. One such measure was the string of widespread lockdowns\nthat literally forced people to stay indoors for months. With almost the entire\nworking population working from home, their schedules were not so busy anymore.\n<\/p>\n\n\n\n
They suddenly had\nmore time on their hands and consequently tried to put it to good use by\ngetting in on some of the stock\nmarket action. Hordes of retail investors took out a part of their savings and tried\ntheir hand at share trading. This ultimately led to a record number of trading\nand demat account openings in the history of stock markets. <\/p>\n\n\n\n
4. Retail investors looking for alternative sources of income<\/h3>\n\n\n\n
As a consequence of\nthe widespread lockdowns, many businesses were forced to suspend their\noperations and had to suffer serious setbacks. This directly impacted the\nrevenues of many individuals who had to contend with little to no remuneration\nduring this phase. Some of them suddenly found themselves laid off and without\na job. <\/p>\n\n\n\n
Under such dire\ncircumstances, many such individuals turned to the stock market looking for\nalternative sources of income. The increase in retail investor participation in\nthe month of June 2020 is in itself clear evidence of the rise in the retail\nand high networth individual investors\u2019 share in the stock market. <\/p>\n\n\n\n
5. Weak returns from other investment options <\/h3>\n\n\n\n
In the current\neconomic scenario, the returns offered by many traditional investment options,\nbarring gold, have been very lacklustre. The bank interest rates are quite low\nand the real estate sector is struggling to get back on its feet. Considering\nthese circumstances, more number of individuals have turned to the stock\nmarkets in the hopes of generating some short-term profits to satisfy their\nfinancial goals. This has led to a boom in the number of retail investors in the\nstock market. <\/p>\n\n\n\n
Additional Read:<\/strong> Corporate Loan restructuring. Will it be a Boon or a Bane for the Economy?<\/a><\/p>\n\n\n\n Although there is a strong increase in retail investor participation in the stock market as of late, it still remains to be seen whether this trend would continue further. As the country and the economy slowly recovers, there\u2019s a slight chance of these investors moving away from the stock markets and onto the more traditional investment options. But, for now, retail investors are here to stay. <\/p>\n\n\n\n In uncertain times like these, safeguarding your wealth is as important as earning new returns. So, if you seek customized and expert guidance on how to secure your finances during the current economic crisis TATA Capital\u2019s wealth management solutions<\/a> are just what you need. Our team of expert wealth managers will help you find the investment strategy that\u2019s best suited to your financial goals and help you choose the right investments across a variety of options.<\/p>\n","protected":false},"excerpt":{"rendered":" Historically, during times of economic crises and recessions, investors from the retail and institutional categories have always shied away from investing in the stock markets. <\/p>\nConclusion<\/strong><\/h2>\n\n\n\n