A survey by Mumbai-based equity broker Samco and Nielsen revealed that 67 per cent investors get less returns than an index, fail to beat the benchmark market index and 65 per cent of investors are not even aware of their exact stock market returns. 

Most Indian investors and traders are unable to generate even benchmark threshold returns, says the survey.

“Retail stock market investors should try to outperform the benchmark indices. Also, they should stop active trading and concentrate on simple investing in index funds, which can give them better financial outcomes and returns,” said Jimeet Modi, founder and CEO, Samco.

“In an alarming trend, most Indian investors and traders are unable to generate even benchmark threshold returns. This can be attributed to a variety of factors like lack of a trading system, fault performance measurement, acting driven by emotions in times of greed and fear, relying on tips and financial influencers, excessive leverage, etc,” the survey report said.

F&O segment

A recent study had revealed that the lure of a quick buck was bleeding retail stock market participants dabbling in futures and options (F&O). The study said that nine out of 10 individual traders were making losses in the F&O segment. They made an average loss of ₹1.1 lakh during FY22. As high as 90 per cent of active traders incurred an average loss of ₹1.25 lakh. 

India is the world’s largest market for trading in equity F&O, which most experts say is nothing but a form of gambling. Yet, F&O trading has seen a stupendous five-fold growth in less than four years between FY19 and FY22. According to SEBI, samples from only the top 10 brokers showed that in FY22 there were 45.2 lakh unique individual traders in the F&O segment, up from just 7.1 lakh in FY19. Of this, 88 per cent were active traders, who were making consistent losses. Over 80 per cent of traders in the F&O segment were male.