Dichotomy of an Indian Investor

Every investor who comes to the equity markets has an expectation to either double or triple their investment. Some look at a 3-year horizon, while others are very keen to double their money in 1 year. The best are investors (or should I call them punters?) who want to double their money in 1 month.

On one side, investors want to double their investment, and the next question is, “What is your brokerage?” or “Why is it so high?”

Mind you, a 0.10% charge has now become more of a standard brokerage. In fact, at times, STT is higher than the brokerage.

So, on one side, you want to earn a multiple on your investments (which is fair), but when it comes to paying brokerage, a minuscule transaction cost becomes a bone of contention.

It is the same situation when a person goes to buy an expensive car and then asks, “Average kitna deti hain?”

The story does not change when it comes to other financial products either—be it a discussion on a mutual fund, a PMS, or an AIF. But that is a story for another day.

The question an investor should be looking at is:
What are their expectations from the service provider?

Another dichotomy

SEBI has now mandated every stockbroker to put up an advisory on their website and mobile app login as a “Risk Disclosure for Derivatives,” stating that 90% of investors lose money in F&O trading. In fact, I don’t even know how many investors bother to read it. It is like the same warning on a packet of cigarettes.

The best part is that during all our conversations with investors, I am yet to come across an investor who believes they fall into the 90% category.

Every investor you speak to has one common narrative: “I make money in trading and F&O.”

My only two cents are that each investor should look at their year-end activities in total and not just one standalone transaction that was in the green. If the overall total is green, then you are part of the 10%; otherwise, you are in the 90% category.

And you only need to be true to yourself.

There is nothing to be announced to the world at large.

Profit is yours, and loss is also your own—so tread (trade) carefully!

Disclaimer: Views are my own.