67% investors fail to beat benchmark index returns: Samco Securities' survey

About two-third of the stock market participants fail to beat the benchmark market index, reveals a survey on Indian capital markets and investor behavior by domestic brokerage from Samco Securities. According to the study, conducted along with Nielsen, 67 per cent of Indian investors and traders are unable to generate even benchmark threshold returns. The study by Samco attributed multiple factors including lack of a trading system, fault performance measurement, acting driven by emotions in times of greed and fear, relying on tips, fin influencers and excessive leverage as the key reasons for this underperformance. Samco's Indian capital markets and investor behavior survey with Nielsen was conducted across ten major cities of the country including Delhi, Mumbai, Ahmedabad, Bengaluru, Pune, Surat, Kolkata, Hyderabad, Chennai and Jaipur. This included insights from more than 2,000 investors and traders within the age group of 24-45 years. According to the report, 65 per cent of investors were not even aware of their exact stock market returns, while 77 per cent of investors were not even aware that they consistently need to beat the benchmark indices. Other than this, among the limited 23 per cent of investors who are aware that they need to beat the benchmark indices, more than 50 per cent had no aspiration or idea on how to outperform the benchmark indices. 63 per cent of investors did not even target or have any plans to beat indices. Individual stock market participants must run their trading accounts in a manner where they must consistently outperform the benchmark indices. They should probably stop active trading, as they are likely to have much better financial outcomes by simply investing in an index fund or outsourcing to a professional fund manager, said Jimeet Modi, Founder and CEO, Samco. "Performance measurement, reporting and benchmarking are done fairly well in mutual funds. SEBI has even recommended the same for PMS' from April 1. However, performance measurement is fairly poor amongst individual retail investors, even though they are their own money managers, he said." Incorporated in 2015, Samco Securities is a flat-fee brokerage and investment-tech platform, which provides retail investors access to financial technology, It is a full-service wealth creation platform.