Diagnosing the investors’ pain - 2
As I mentioned yesterday ( see here ) the pain being felt presently by the non-institutional investors is disproportionately high. For the investors and traders who have spent a short period of time in the market, mostly those who started investing in post Covid period, the pain may be actual, while for those who have been investing for a long time, the pain might only be notional due to perception of relative underperformance or loss of opportunity cost. Over exposure to small cap stocks While large caps account for ~60–63% of total and free-float market capitalization, retail participation in this segment has been relatively muted. Institutional investors—both domestic and foreign—continue to dominate ownership and trading activity in large caps. As a result, price discovery here has been more orderly, liquidity deeper, and drawdowns relatively contained. In contrast, non-institutional investors (retail investors, HNIs, family offices, and smaller proprietary books) have had di...