To Invest or Not to Invest

This is the question that must have crossed everyone's mind at some point or the other and everyone has there own perceptions and notions about the stock market. Many a people look at stock markets as engines of economic growth while others see stock markets as gambling dens which should be completely avoided. Now, why do we have such a drastic divergence in viewpoints.

Lot of it has to do with with the kind of environment in which one is brought up. Even today, in most of the middle class families in India, stock markets are perceived as gambling dens and should be avoided. Statistics show that Indian middle class is still skeptical about investing in stock markets and prefer more safer instruments which have no risk. This can be partly attributed to the middle class mentality which always tends to be risk averse. But the major reason is the lack of financial literacy. Even, when one ends up investing, most of the times, it is by blindly following others(the TIP culture that prevalent widely in the Indian Stock Market). You invest because someone else tells you to do it and many a times end up losing money. You think investing is risky.This is because you are not in control of your investments. How many of us have heard of people losing their shirts during the stock market crashes and scams(India has had its fair share of scams) ? Most of us, I guess. These events play a role in how the stock markets are perceived by oridinary people.

Having said that, can a person be in complete control of his investments? Not really...
There is a certain degree of uncertainity and risk involved in investing. There are a lot of factors that are beyond the control of investors and are not known before hand. But this risk can be minimized with with financial literacy and if a person takes control of his/her investments.

Knowing all these dangers associated with investments, Is it really worth it ? Inspite of the failures and scams the market has seen, one should not overlook the positive aspects of the stock market. It's the same market that has helped raise capital for so many growth stories India has seen. Be it a Reliance or Infosys.

In summary, I would say that investments have their own positives as well as negatives but one should not have any preconceived notions about the market. One should have an open mind when thinking about stock market as an investment option and should be knowledgeable about the financial decisions being taken. The author of "Rich Dad Poor Dad" has rightly said that it is the investor who is risky and not the investment.