Retail investors struggling to make profits, Motilal Oswal explains why
What's the story
Motilal Oswal, the CEO of Motilal Oswal Financial Services Limited (MOFSL), has stressed that many retail investors are losing money in India's volatile stock market due to their obsession with short-term trading.
He made these observations during a panel discussion titled 'Risk, Resilience, Returns: The Art of Wealth Creation' at the Business Today MindRush 2025 event.
Investment strategy
Long-term investment is key to wealth creation
Oswal noted that only a fraction of people have actually made money in the stock market.
He said, "If I have to look at the people who have made money, it is only the people who have invested into either the mutual funds or into the stocks for long term, which is unfortunately a very small minority."
He emphasized on long-term investment for wealth creation.
Investor behavior
Retail investors driven by greed, not long-term goals
Oswal highlighted that while 26% of Indian households now have direct exposure to equity markets, many new investors are driven by greed rather than long-term savings objectives.
He warned that this often leads to speculative short-term trading or investing in unknown companies, resulting in losses for most retail investors.
Market forecast
Oswal predicts muted growth for next couple of years
Oswal predicted market growth would remain muted at around 10-15% for the next couple of years.
His comments come as the stock market shows signs of recovery after weeks of volatility.
Having spent four decades in the market, he noted volatility is increasing due to geopolitical developments and rapid information spread through social media.
Market analysis
Nifty earnings growth slowdown contributes to market correction
Oswal attributed the current market correction to a dramatic slowdown in Nifty earnings growth.
He explained, "Between 2022-24, the Nifty earnings went up CAGR of 26%. 26% year after year for two years. And this year after two years kind of growth now we are seeing kind of very muted growth at about anywhere between four to 5%."
Despite recent turbulence, he assured that the fundamentals of both the market and economy remain strong.