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Why Don’t You Invest in the Stock Market?

The obvious question I may ask you is – “Why do you invest in the stock market?”

Is it to fund your child’s higher education? Your dream home? Your retirement?

But there’s a related question that I have for millions of other Indians across the country (and you might be one of them) – “Why don’t you invest in the stock market?”

As per the SEBI, less than 5% of Indian households own stocks or related investments. That leaves 95% that do not.

Part of this is due to a lack of wealth. A large majority of Indian households simply don’t have any money to invest.

On the other side of the spectrum, those who have a lot of money – the wealthiest – they may avoid stocks because ownership in private businesses offers better opportunities.

But what counts for the remaining Indian households – largely the middle class – that has stayed away from the stock market in the past, and have enough excuses to do so now as well.

The excuse that stock market does not provide good returns isn’t valid.

Around 30 years of data available for the Indian stock market makes one point clear: Over the long haul, the stock market has been a great place to grow your wealth, with returns averaging around 18% per annum over a 30 year period.

That’s far better than returns from bonds, cash, and real estate.

Stocks win over the long haul, and yet a large number of middle-class Indians avoid them.

So the answer to the question – Why don’t you invest in the stock market? – is hard for me to know.

But the answer lies within you – the investor.

You tell me – Why don’t you invest in the stock market?

  • Is it because your stock market returns have been miserable in the past?
  • Do you have the fear of being cheated by financial advisors and/or companies going bankrupt?
  • Do you hate the stock market volatility?

You see, we Indians don’t have the luxury of a social security net, so we are fully responsible for financing our own retirements (and other financial goals).

For most of us, thus, the only way to get there is by having a good exposure to stocks over many years.

So, if you are shunning stocks now for any of the above or other reasons, will you eventually change your mind and invest in the stock market?

What makes you not invest in the stock market?

Let me know in the Comments section below so that we can start a discussion around this very important topic that concerns your financial future.

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Vishal,
    Let me try and answer your questions.
    1. Stock market is the place where there is so much info that it is very hard to separate truth from false hood.
    2. track record…hard to define companies start off well and down the line loose focus get greedy etc. We never know under what personnel pressure the management is. Satyam is prime example.
    3. Regulation is a new entrant just come in, by stock market age. high profile scams and artificial bubbles has affected the investors trust in this market. Investors once affected will not come back.
    4. The worst part of these scams is that well educated and qualified persons working in reputed firms have/ are involved. eg PwH.
    These are the few i could think of after reading your post.

    • Agree with Ramesh’s views. Those are some of the reasons why Mutual Funds have come up as a way of investing.

      I am of the view shares/ stocks is an asset class which you ignore at your own peril especially in a country like India, which is witnessing and hopefully will continue to witness growth. However, if you were in the stock market in Japan in 90’s and in US in 2000’s I am told your returns would be negligible – because growth had slowed / vanished, but even there you could find good stories.

      You can spare time and put in effort or borrow someone like Vishal’s effort and invest directly which to me would be an active investor. If you chose to be a passive investor then you may be better off putting money in a few of the well performing mutual funds (though here also you have to be alert regarding change in fund manager or any other news). I do both.


  2. I do invest in stocks now but these were “my” reasons before I started. Believe a lot of people are in my past shoes.
    1. What is a stock market? People keep talking about it.
    2. I heard that people either become rich or become pauper in the stock market. Why to take that risk, I don’t have a family fortune left for me.
    3. Bank FDs are the safest and LIC policy exists for so long. Why change the instruments?
    Then I made the courage and got into stocks with few so called advice like, you should book profit when you get a chance and don’t be too greedy and lose the money in stocks.
    So, I bought stocks based on market tips and news, basically speculating.
    4. OMG, I just made 5000 rupees in one stock and also lost 2000 rupees in other stock, anyway I am in 3000 gain.
    5. That stock is ok, atleast I sold it for the same price I bought, thank god. Stupid me, who will pay the brokerage for buy and sell?? So I was actually at loss 🙁
    One fine day, I started reading about a Balance sheet and then got so adamant to set my portfolio right, I started reading lots of articles and blogs. I can say, I am a much better investor now than before, but still learning. Thanks to blogs like this for spreading the knowledge.

  3. Well, i think that the main reason for the people not entering the stock market is lack of knowledge. They might have listened very few things about the stock market and based on that they might have drawn the conclusions negatively. They feel that Bank F.D’s and others are very good instruments and they get very good returns. But definitely its not true. They may say that they give 9-10% return , but the actual returns will be 6-7%(tax).

  4. Dear Vishal,

    My opinion of Middle class not investing in the market are as follows:

    1. Not much money in the hands of investor (unless you are in IT!).

    2. Lack of Knowledge and fear of losing money in stockmarket (past news like stock market scam, IPO scam).

    3. Unable to forecast how much money is required to live the same life style or meet other future expenses. Lacking the capacity to understand the effect of inflation.

    4. Investements in real estate (through loans and paying EMI) and gold (in the form of Jewellery) reduce the investing power of middle class investors.If something is left for investment it is being directed to ULIP or other unproductive investments by the greedy Financial Advisors and also not to forget those LIC agents fooling the poor investors. Almost every middle class household do have a unproductive LIC policy.

    5. I think we Indians are mentally bonded to hard assests like real estate and gold. Also to LIC.



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