No option to fall, manage and learn to invest in the stock market
RECOMMENDED POST: Remember these things before taking loan
Investors get the best learning from their experience. But there are some investors who need to be protected from risk. A few days ago I joined a news channel debate show. Somehow the topic of the debate became whether equity investors should be treated like young children.
SEBI has announced some new steps. This will eliminate margin trading in the cash segment of the equity market. However, the traditional brokerage industry has criticized SEBI's move.
Most people who are related to the industry say that this will reduce the amount of buying and selling by retail investors and will also affect price discovery and liquidity. Its direct effect will be seen on the trading volume of brokers who buy and sell in physical form offline.
A few weeks ago I referred to an interview with SEBI chairman. In this interview, the SEBI chairman had expressed concern over the spurt in retail investor activity in the equity market. This means that the recent steps SEBI has taken to end mass trading are a response to the spurt in retail investor activity in the equity market. What's more, this was continuing for quite a while.
There is no option to learn from your experiences. The thing to note is that I keep myself in the same category. The truth is that you can learn and read how many theoretical things, but until you do not make some bad decisions and do not make losses because of this, you do not know every little big thing related to investment. For example, children play and get injured themselves, only then do they know what to do and what not to do.
In a way, when parents try to protect the children from these dangers too much, they harm the children. The reason for this is that children who are under too much security grow up without facing difficult situations. And the result of this is that when these children grow up and get caught in difficult situations, they are not prepared to counter it.
Those who are not leveraged traders also suffer losses but not much. This is enough to teach them a lesson. But the lesson should not be so expensive that they get out of the investment world. It tells what the rule-of-law goal should be. Most of the people who start investing in the equity market, most of them start as short-term traders. After this, they get to know better ways of investing while taking losses and learning from some wrong decisions.