Retail participation in the stock market is decreasing, but overall market traded volume is increasing.

The Indian mutual funds industry has seen record inflows through systematic investment plans (SIPs) in recent months. However, the retail participation in the stock market is a different story.

Data from the National Stock Exchange (NSE) shows that the share of individual investors in the total traded volume in the cash/spot segment has decreased from 45% in FY21 to 36.5% in FY23. This is likely due to a number of factors, including:

• The COVID-19 pandemic, which led to a decline in trading activity as people worked from home.
• The subsequent market volatility, which made some investors hesitant to trade.
• The rise of proprietary trading, which has led to increased competition from institutional investors.

Despite the decrease in retail participation, the overall market traded volume has increased in recent years. This is due to a number of factors, including:

• The increasing popularity of online trading platforms.
• The introduction of T+1 settlement, which has made it easier for investors to trade.
• The strong growth of the Indian economy.

What should investors do?

Investors should focus on long-term investing and not be discouraged by the short-term fluctuations in the market. They should also do their research and invest in quality companies with good management.

Here are some tips for investors:

• Start small and invest regularly.
• Diversify your portfolio across different asset classes.
• Rebalance your portfolio regularly.
• Don’t panic sell during market volatility.
• Invest for the long term.

With careful planning and execution, investors can achieve their financial goals over the long term.

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