INVESTORS DO NOT LIKE TO INVEST IN STOCK MARKET DUE TO FOLLOWING:
For investment in share market, demat account and trading account are necessary.Investor has to pay Rs. 25/- per month for maintaining demat account.For opening Trading account,after Initial fee of Rs. 750/- , Rs.40/- or 0.5 % of value of transaction has to be paid for brokerage. In addition DP also charges nearly such amount. Thus major portion of profit is not available to the traders in stock market.
Most stocks fall in price rapidly and most investors closing their trading account due to heavy loss in share trading. Even good stocks like TATA STEEL, Bhel etc get too much drop in price value.
Most brokerage firms persuaded traders to sell their stocks on getting 4% profit.After selling, the money is invested in purchasing other stocks.When earlier stock performs well and new stock purchased is showing loss in their investment, investor feels brokerage firm cheated them.
Mutual fund does not incur more brokerage charges than trading shares in brokerage firm .No time loss is there after investing in mutual fund.But in stock market, most time is required to know the trend of the share in the market.For time consuming, Mutual fund is better in stock market.