Percentage of Successful People  in the Indian Stock Market

Experts say, and it is also widely spoken in the media circles that only 5 percent of the investors become successful in earning good profits while others fade out.

Why is it so? 

In the below lines, you can uncover the fact that the average returns on equities are 18 percent of CAGR only, and the effect of market sentiments.

In addition, you can learn Warren Buffett views on trading. 

Before declaring this percentage of success rate specifically in the Indian stock markets you must understand the nature and the course of stock markets that makes millions to dip in the stocks through. 

Stock markets can become a right source of investment and the returns should be a transformative moment in your life. 

You must know that an equity can produce good return and the return on your stock investment is a combination of two factors: 

First, the stability in the stock price is dependent on the company’s performance. When a company outperforms and releases quarterly dividends, the stock price graph becomes more stable.

Second, when the stock is in a trading session, human emotions, and market sentiments drive the prices up, down and stabilise. 

Note: 

The efficacy of the share performance in the market depends on the liquid, and volatility of the stock markets. These parameters define the level of stock trading. 

Important Research Analysis on Stocks: 

Two important surveys do reveal startling facts: Only 18 percent of the equity market investors are able to make money and the remaining are able to get only 50 % return on their investments. 

Average Returns on Investment in Equities: 

First Report:

According to the Crisil report published in 2017, it is analysed that the average return of an equity investment is only 18 percent CAGR and this percentage began in 1997 and still continues. 

Second Report:

Dalbar Associates report, analysed the task through comparison. The associates compared the returns provided by the S&P 500 companies and the actual average return attained by investors. 

The observations did expose the fact that a significant gap was found between the trajectories of the two returns. 

Long run Equity Performance: 

In the long run, equity market returns are proportional to the corporate earnings. 

If a company shares rise due to its strong corporate fundamentals, then the earnings rise that are declared in the quarterly report, thus a share price does show an improvement. 

Share Prices = Corporate Earnings

Short run Equity Performance: 

The market sentiments drive the stock prices, they rise or plunge down. 

Here, share prices = corporate earnings + market sentiments.  

Expert Stock Traders Opinion:

According to Warren Buffett, the most successful investor in the stock market history is always dependent on in-depth analysis of stocks and therefore, his equity holdings are always intact. Still, market sentiments decide our returns and how?

Sentiments Rule: 

Sentiments rule your mind and if it remains uncontrolled then the fear of loss will increase the pain of loss of the money.

It is the prime factor to have the investors switch over to intangible assets like gold and immovable property like real estate. Though the equity gives more returns than the intangible assets.