Investment Return Vs Investor Return – Why Investors Earn Below Average Returns?

"Do you agree with my view of why Indian retail investors aren’t able to get the returns?"

I won't get into your view, but i have some reservation about the question itself. Question is why retail investors aren't able to get returns. I think leaving out a few out there, others are not investors at all, they are traders. That's why they are not getting returns.
I think i should elaborate.
Buying shares of a company means investing in a business. An investor is supposed to understand the business model and also have a general understanding of the prospect of the company. If he is satisfied that the business has future ,he invests: say @ 10/- per share. Now the business does well and share price appreciates to 50/-. Why does he exit? What could be the reason for exit unless there is a paradigm shift in business policy or Government regulation that puts the business prospect to jeopardy?
If he is entering at 10/- and exiting at 50/-, he is not a share holder of the business, he is just trading with the shares. Time frame does not matter. It may be intra-day, it may be weekly, monthly or yearly.

 

While I agree to most of it, I do believe that one should book profits from time to time. Either sell some and get back your capital or sell and buyback at lower cost etc. I mean whichever way suits an individual.



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Really good article

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Very nicely explained with examples above topic.followers can benefit from your last experience.

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