Retail Investors Always Behind the Curve

Despite better Corporate Governance & Reporting Guidelines, retail investors lose out even in developed countries. They are fed rumors that are unfounded, purposely misleading and generally left to grope in the dark, while information from analysts are contradictory. By the time the truth emerges, they act after the proverbial horses have bolted!

But the game will go on; the fool & the money are easily parted time & again! Success stories make some rue the missed opportunities while the majority losers are left to lick the wounds. What looks like sure-shots, with marketing hype, soon turns out to be duds. For every successful company, there are many who bite the dust sooner or later. The retail investor is unlikely to cut losses with stop-loss etc.

Buyer beware is the dictum, but falls on deaf ears, mostly! The great rewards, that are touted, easily lead many to a path of ruin. Most technology companies were a big let-down except the few, not many could have picked the winners. And when the market melt-down happens, some are forced to liquidate their positions, losing all their savings overnight.

Man lives on hope; without that life is meaningless. Stocks are supposed to give higher returns than other investments in the long run but retail investors are easily burnt, some risking most of their life-savings.

In what way can the retail investors be protected from being taken for a ride by the unscrupulous? It is again their call only; despite the wide publicity, even internet scams claim many victims! The real victims are always those that jump without thinking & first-timers are easily hood-winked by glib talks.

The regulations cannot cover all eventualities; some promoters may have good intentions, others just out to make easy money. Even the best of ideas need the best management which is never assured. One key-man might be the inspiration & the success could depend on his drive & ability, but his association with the company can be short-lived for any number of reasons.

The only way to get secured returns from stock markets for the retail investors seem to be by relying on few blue-chips which have given consistent returns in the past; the other way would be investing in those that are preferred by the wizards in the game. But, in real life, many cannot discipline themselves & get carried away; even Warren Buffet was led to invest in some technology stocks, without conviction!

The bottom line is the gullible should be protected & forewarned about the pit-falls of investing to make a fortune, as most bite the dust & those who cause their heart-burns, willfully, should not be allowed to go scot-free.