Enhanced Market Stability: A Green Light for Retail Investors
Balwan Bansal
Delighting 500+ listed companies, VCs and foreign funded entities for 18+ years, by solving their deepest regulatory, accounting & taxation problems, along with 120+ professional team members
In recent times, the capital market has seen a remarkable improvement in stability, reduced susceptibility to external factors, and a notable decrease in overall risk. These positive changes are encouraging retail investors to trust the market and confidently invest their savings.? Increased stability lays a solid foundation for investor confidence.
This stability is reflected in various facets of the financial world, from reduced volatility in asset prices to smoother market functioning during periods of uncertainty. ??The stability is evident from reduced risk measured in terms of standard deviation in the Sensex. ?The standard deviation has from 23% during Calendar Years 1998-2013 to 14% during Calendar Year 2014-2023 (*excluding subprime years and covid year).? Number of days with more than 4% fluctuation has also reduced notably.? This reduction in standard deviation and number of days with more than 4% fluctuation is evident from the table below:
The overall risk in the market has decreased, making it a safer investment space for retail investors. With less volatility and uncertainty, investors can allocate their capital more confidently, knowing they're exposed to lower levels of risk.
In conclusion, the enhanced stability, reduced external impact, and decreased risk in the capital market offer retail investors a compelling opportunity to trust and invest their savings. With a more secure investment environment, investors can pursue their financial objectives with confidence, knowing they are participating in a market conducive to long-term success.