What Explains The Aversion To Equities?

When we speak about equity investing, be it direct stock buying or the mutual fund route, one common thing that investors talk about is the volatility in the market!! This applies to both equity and non-equity investors. I say equity investors too, as we do receive calls from existing equity mutual fund clients when there is a fall in markets. In my experience the reason for equity aversion is not volatility or uncertainty alone, it’s more of ambiguity attached to the nature of the equity asset class. Volatility is present in many other asset classes—be it Bond, Gold, Real Estate etc. Equity as an asset class may be perceived differently by investors, hence, they label it as volatile. The human mind is designed to follow a pattern when it comes to most decisions in life. Indians’ darling asset classes have been fixed deposits (FDs) and gold which is what Indians follow...