Equity cult is a non-starter: Why we are still a country where only a small percentage of the population invests in equity
equity cult to spread widely after the euphoria of the first set of financial reforms in 1984, memories of money made in the Reliance public offer, and the market boom of 1985 that spawned financial journalism and company analysis for public consumption. Forty years later, we are still a country with a small percentage of the population investing in equity.
Investors in equity still focus on IPOs and trading. They like the idea of making money quickly and see equity as some skill-based gamble that pays off. A small group intensively pursues equity analysis and invests in stocks with long-term conviction. Mutual funds, portfolio management services (PMS) and alternative investment funds (AIF) are part of many household portfolios, but that growth has been gradual, taking its time to entrench itself. The majority that lies outside these pursuits still remains sceptical, unwilling and somewhat scared.
When I tell them that equity investing is like participating in the success stories you see around you in every day life (Peter Lynch made that persuasive case so many years ago), they are unable to grasp it as an implementable idea. Do your children go to government schools? Who is is your mobile service provider? Which bank do you have an account with? Where do your grown-up children work? Who delivers your grocery and food? I ask these questions to simple investors who care to listen. They understand that the economy is now driven by private players, not the government.
However, they don’t trust private players. Do
