Stock market investment in India is plagued by a huge gender divide.
When it comes to investors who have made fortunes from stock market investment, the most prominent names that are likely to come across one’s mind are Warren Buffet, Benjamin Graham, Peter Lynch, Charlie Munger and Rakesh Jhunjunwala.
Well if you noticed all these are men.
Today women are giving tough competition to men in almost all walks of life. Kalpana Chawla, Indra Nooyi, Mary Kom, Mithali Raj, Sania Mirza and Indira Gandhi are some examples of women who have broken gender barriers and topped in the respective fields such as aerospace, business, sports and politics.
However when it comes to stock market investment, how many such names can one recall?
Male Investors Dominate Stock Market Investment In India
According to a survey conducted by Central Depository Services Limited (CDSL), male investors constitute the major chunk of investors (75%) in Indian equity markets, while the percentage of women investors stands at a mere 25 per cent.
There are several reasons why women do not take active participation in stock market investment.
Let’s take at some of the reasons why woman prefer traditional investments like gold, real estate, bank fixed deposits, post office deposits etc. over stock market investment:
Preference For Liquid Investments Over Higher Return Potential Of Stock Market Investment
Women prefer financial assets with a high degree of liquidity such as bank fixed deposits while men are more willing to sacrifice financial asset liquidity in order to earn higher, risk-adjusted total investment returns.
Fear Due To Risk Factor Associated With Stock Market Investment
Stock market investment can be risky over short term and many investors have lost money due to erratic investment methods. Hence there is overall perception that stock market investment is one with high risks and it is very difficult to create wealth from it.
Assets like gold, real estate, and fixed deposits also have some inherent risks. While gold needs additional security for safekeeping as it is prone to theft, real estate does not have high liquidity. Fixed deposits too come with their own risk which most people are not aware of.
As per RBI norms, under the Deposit Insurance and Credit Guarantee Corporation scheme, each depositor in a bank is insured upto a maximum of Rs.1,00,000 for both principal and interest amount held by the depositor in case of liquidation or cancellation of bank’s licence.
Low Levels Of Financial Awareness About Stock Market Investment
Stock markets in India have consistently outperformed every other asset classes of India right from the beginning. Still most working women prefer to invest in asset classes like gold, real estate and fixed deposits because they find stock market investment to be very complicated and complex to grasp.
To conclude, with women conquering most domains of life, stock market investment should be no different. The participation of women investors in India can definitely increase if proper financial awareness is given to women, educating them about the benefits of investing in equity.