The Hindu Business Line : Survey advises retail investors to take informed decisions

Painting an optimistic picture on expected expansion of activity in the capital market, the Economic Survey has said that the strong fundamentals of the economy combined with higher growth would help sustain the interest of domestic and foreign investors in the market. This forecast is despite the possible subdued global growth.

While stressing the need for regulators to remain proactive and vigilant to obviate the occurrence of any irregularities in the conduct of business in the market, the Economic Survey 2007-08 has also advised individual investors to take “informed decisions and remain cautious.” The Survey has said that the individual investors would do well to resist from commonly observed “herd mentality” and “panic” in their buying and selling operations. It highlighted that investors’ awareness is equally important from the market stability angle as investment in equities could be based on incomplete analysis and guided by short-term speculative gains.

The performance of stock prices in the secondary market hinges broadly on long-term and short-term factors, says the Survey. In the long run, strong world output growth is important to sustain the investment activity across the globe.

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