Stock Investing Strategies

Stock investments

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Archive for August, 2013

Decline in the number of investors

In some countries, there has been a significant decline in the number of investors in the stock market despite an increase in population and GDP levels. Some of the reasons for the decline are:
1. Time consuming – investing in shares is very time consuming as the investor has to spend a lot of time researching the company and tracking the share prices, dividend declaration. Many times an investor may place an order for shares , but the transaction may not be completed , if the share prices fails to drop to the desired price. Similar, a share sale may not be completed due the fluctuation in share prices.
2. lack of transparency there is a limited amount of information available on publicly listed companies. Most investors have to rely on inputs from press releases put out by the companies they plan to invest in and this information may often not be accurate.
3.misleading guidance , tips and information. often influential people like television anchors, newspaper columnists are offered incentives by large companies to report favorably on them. Many gullible investors believe in these tips and invest without doing any further independent research. As result, the investor may suffer losses, if the information is not accurate.
4. Risks – most other investments like bank fixed deposits, bonds, mutual funds are passive investments, which often give the investor fairly assured returns, without much effort on his or her part. On the other hand, for a share purchase, there is no guarantee that the price will increase, it is equally likely that it will decrease and the investor will suffer a loss. So investing in shares is a risky option compared to other safer options which given guaranteed returns.