Indian stocks are primarily in one of three stock exchanges in the country, the largest being the Bombay Stock Exchange (BSE). This is the 11th largest exchange globally, by market capitalization. It embraced the electronic trading system in 1995, while the NYSE became a hybrid market only in 2007, with both open outcry auctions as well as electronic trading. It has also been cited as one of the best performing stock market in the world by Reuters.
From a recent study by Tarun Ramadorai, University of Oxford, it has also come to light that in India, people prefer to own stocks directly, instead of through mutual funds. The extent of this disparity is staggering, and is almost 9 times higher than any other equity market in the world. The trend, however, suggests that individuals are moving towards mutual fund investments.
The study, which analyzed 20 million accounts, also suggests that older and more experienced investors get higher returns overall than rookie investors – who are prone to volatile stocks and IPOs which present opportunities for higher gains. This difference is so clear, that it is safe to say that Indian individuals who invest in the market, experience improved performance after 5+ years of experience in the equity market.
Vaibhav Sharma 