Safe Route For Better Returns

Retail investors are back in the market. The huge inflow of new depositary accounts opened between March and April 2020 reflects the activity. As per records, Central Depository Services Ltd (CDSL) has opened 1.2 million new Depository Participant (DP) accounts during this period as against 4.2 million DP accounts between April 2019 and Feb 2020. The new breed of Robin Hood investors are moving rapidly on the back of online trading activity but proper risk management and asset allocation is yet to be understood. Some key problems and challenges include lack of knowledge, reading, networking and process. Almost 90 per cent of the retail investors and traders don’t know what the company manufactures, what are its revenue and profits, dividends paid, management quality, which is like driving a car without brakes. Compromising on asset allocation and position sizing is the second big...