There are a number of reasons why most people in India do not invest in stocks and invests in LIC or FDs instead. As a matter of fact, even less than 2.5% population of India invests in share market.
Few of the common reasons for the low participation of the population of India in share market are- Not willing to take the risk, common myths in the society like 'Investing is gambling', lack of proper guidance, lack of capital, preference towards the other easily available conservative assets like gold, property, FDs etc.
Nevertheless, one of the biggest reason why people do not invest in stocks in India is their unawareness towards stock market investing. They do not know how much returns they can get by investing in stock market.
A common villager doesn’t know how to earn from stocks and doesn’t understand the power of compounding.
A local retail shop owner does not know what is a demat or trading account and how to open one.
An old small-town electrician hasn’t ever met an investor or trader in his entire life.
Only if the people are more informed about stock market investing, then the participation of Indians towards stock market can be increased.
On the contrary, most of the Indians know about LIC or FDs and hence are willing to invest in it.
I hope the answer is useful.
I'll attempt to bring another measurement into this never-ending question and you choose will this fit into your speculation portfolio.
At the point when we state LIC, we in a split second beginning pondering protection.
It's undeniable to such an extent, that is their main event. They safeguard individuals!
Presently, when we contrast it and common assets, abruptly we begin considering the profits on venture (ROI).
As it should be, toward the day's end, who needs to put resources into an item which is giving lesser returns than the other, in examination.
Yet, pause, how might you contrast a protection and a venture? And furthermore, the protection spread in a gift plan isn't adequate to cover my family's way of life after my demise.
Truly! It's actual gift plans are insufficient to cover your family's way of life costs after your passing, regardless of whether you can get an adequate life spread blessing plan, they are either excessively costly or it looks bad to get one when we can get adequately life Cover through term plans, at an a lot less expensive cost. In any case, before finishing up let us see the ROI from a blessing plan and afterward choose..
LIC stands for Life Insurance Corporation of India.This policy provides yearly survival benefits from the end of the premium paying term until maturity.The main function of LIC is to collect the savings of the people through a life insurance policy and invest that money in various financial markets.In case of sudden death of the policyholder within the policy tenure, the nominee gets the assured sum.
Fixed Deposit or FD is a type of term deposit that gives you a fixed rate of interest until maturity. By investing in FDs you can save and earn money at the same time.A fixed deposit, or 'FD', is a savings/investment account that promises the investor a fixed rate of interest.
Indians have a love-hate relationship with the stock markets. Research shows that only 2% of the Indian investors invest in the share market.the reasons for avoiding this are Financial Illiteracy, lack of money,Patience,Traditional Investments,Past Experience,'Play Safe’ Attitude,Word Of Advice,Past Experience,Lack Of Courage etc.