Book digs into mysterious world of equity market

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New Delhi, Jul 4 (PTI) A new book seeks to dispel misconceptions about the equity market as it looks at stock market investing from the lens of theory, psychology and business.

It also showcases index investing as a solution to earning a fair share of market return while shielding against financial sharks to sail safe during the impending economic slowdown.

“Index Investing: A Low Cost, Low Risk Strategy to Investment Success” is written by complex securities analyst Abhishek Kumar and published by SAGE India.

The author says mass ignorance about some of the fundamental principles of investment has resulted in three major consequences – low participation of investors in the Indian equity market, below par investment return, and huge income for mutual fund houses and brokerage firms in the form of fat fees and commissions.

The purpose of the book, Kumar says is to “dispel those misconceptions, myths and misinformation which are being spoon-fed to the common masses by these financial croupiers and to bring equity in the equity market”.

Most investors get it wrong when it comes to understanding the nuances of the equity market.

According to the author, this is not because investors are ignorant or lack the requisite skills to understand the factors affecting this market, but mainly because they get misleading information from market players and financial intermediaries.

“As the market keeps falling and rising, testing the patience of the investors; it becomes imperative for the investors to understand that such volatility is the inherent nature of the market and they get rewarded only for their ability to shoulder such risks,” he says.

“Now not every risk gets rewarded and it is the duty of the investors to eliminate such risks which pays them nothing. Investing in an index fund does the job of eliminating such risks and ensures that its investors outperform the vast majority of all other investors in the long run,” he says.

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