Indians may buy less shares of Indian business companies as compared to foreigners but they have started hiring professionals to purchase stocks on their behalf.
The professionals hired for the purpose specialise in portfolio management service (PMS). City’s leading stock brokerage firms have different figures but most agree that average rise in investors hiring professionals is up by 10%.
"In Indore, people who hire PMS experts to buy shares on their behalf have risen by 10% to 15% in the last six years or so," Swastika Investmart Limited manager (PMS) Tuhinanshu Jain said.
This is how it works. When a business company makes shares available for people to buy they are called stocks and this is what people trade through stock exchanges and brokers.
Though present day investors have diverse information like corporate earnings reports, macroeconomic indicators, state and national economic policies, they may not have time to analyse stock market rise and fall.
Therefore, they approach stock brokerage firms who employ PMS experts with money.
The PMS experts who keep tabs on stock market fluctuation on daily basis help investors to buy shares of company which do well financially. This helps investors to get good return on shares they buy.
"I have worked in marketing sector for long and I therefore analyse all the angles before buying shares. But not many people can do this," a private hospital employee Hemendra Singh said.
The global economic meltdown in 2008 affected business companies and stock prices fell. Many people sold shares to invest in risk-free investments like real estate and gold.
"Real estate has grown three times of what it was in the last one decade while stock market fluctuated between highs and lows," Tuhinanshu Jain said, citing reason.
This also pushed investors to hire professionals for safe returns on money they invested to buy shares. But what do experts look for before suggesting clients to invest in shares of particular company?
"Among other factors, we watch for business sectors which union government wants to promote and how the business companies falling under those sectors are doing," said stock market research analyst Vijay Singh Gour.
A parameter to assess government/public sector companies is whether they have cut down employment. If this happens, it hits consumer-sensitive stocks hard. This is because investors think that these companies are not in good financial health and buying shares of companies will not be safe.