Indian Retail Equity Investors tend to lose more than profit from it.

Indian retail equity investors tend to lose more than profit from it. Either they are in a habit of selling the winning stock too early or holding back the losing stock for too long. Ultimately they are trying to chase a zero rate of return on their stock investments when investing themselves.

A Study was conducted in ISB Hyderabad the under the leadership of Sankar De. 

The study states

, “Since on an average the retail investors lose more than they gain, trades of the retail investors end up being value-destroying for themselves and beneficial for institutional investors, who are usually more informed as well as more rational." Staying away from the market at a distance is the right way for investors - implying investing through mutual funds or other platforms could trim losses, he said. (Other platforms for investing indirectly in stock markets shall be discussed in another blog. You can chose to join this site for future updates.)

What makes retail investors behave this way? The answer lies in two powerful behavioral instincts. "One, their approach to valuation of their investment options is based on feelings rather than careful calculation under which, what matters is the presence or absence of a stimulus, in this case profits, but not the size of the gains (losses).

"The second reason is the compelling influence of zero as a goal. The distinction between positive and negative numbers is of fundamental importance to human thought processes in many areas, not just investments," he said.

After India, China is home to largest number of retail investors at 1.66 million followed by Finland (1.3 million), US (1.24 million) and Japan (1.17 million).