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Empowering the Retail Investor

Empowering the Retail Investor. Ajit Dayal Chairman, Quantum Information Services Limited. Your money matters!. Household savings, + 23% of GDP, Rs 5,533 bn (US$ 118 bn) Corporate savings, + 4% of GDP, Rs 895 bn (US$ 19 bn)

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Empowering the Retail Investor

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  1. Empowering the Retail Investor Ajit Dayal Chairman, Quantum Information Services Limited

  2. Your money matters! • Household savings, +23% of GDP, Rs 5,533 bn (US$ 118 bn) • Corporate savings, +4% of GDP, Rs 895 bn (US$ 19 bn) • Government savings, - 1.1% of GDP, minus Rs 253 bn (minus US$ 5 bn) The Investor Empowerment Programme, GIWA

  3. Money flows into shares and debentures declining. • Household sector put less money in financial assets • Within financial sector the household sector put less money in shares and debentures The Investor Empowerment Programme, GIWA

  4. New products and channels for your investment flows • Directly into stock markets • Mutual funds: equity, debt, balanced • Insurance policies: new companies, some product changes • Bank deposits: new banks, new products The Investor Empowerment Programme, GIWA

  5. You make people rich! • Mutual funds control approx Rs. 1,034 bn, (Rs 103,400 crores) a 1% average fee to the fund manager gives the AMC revenues of Rs. 10 bn (Rs 1,000 crores) every year! • Trading volumes of avg Rs. 40 bn (Rs 4,000 crores) per day generate broking commissions of approx Rs. 26 bn (Rs 2,600 crores) every year! The Investor Empowerment Programme, GIWA

  6. Do they make you rich? The Investor Empowerment Programme, GIWA

  7. At the very least, do they provide you with a service? • Educate – help make an informed decision • Discuss alternatives that benefit you • Advise, based on your situation,not theirs The Investor Empowerment Programme, GIWA

  8. Scams, scams, and more scams…. • Murarka Finance, 1987 • Mazda Leasing and Mehta, April 1992 • Morgan Stanley Mutual Fund, April 1994 • tMt = TNT, 1999 – 2000 • Mastershare and UTI 1988 – 2002 • ?? • You choose the alphabet, there is a “scam” around it….. The Investor Empowerment Programme, GIWA

  9. Greed: Two hands to clap! • The financial “services” industry wishes to make quick money, • Investors wish to make “quick” profits, • Greed on both sides • Invest, do not speculate! • The regulator will try to help you but will fail! – by definition has to fail (SEC in USA, SIB in UK, SEBI in India) The Investor Empowerment Programme, GIWA

  10. Therefore… • Keep your money at home, under a mattress? • Step out into the world with realistic expectations – don’t be greedy • Select a product or advisor that works for your long term benefit, not for a short term return or fee • Buyer beware! The Investor Empowerment Programme, GIWA

  11. “Tip” of the day… Information => Power + Discipline + Patience = Returns The Investor Empowerment Programme, GIWA

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