Investor Empowerment Through Education
Jul 09, 2003

Author: PersonalFN Content & Research Team

That was the motto of the Investor Empowerment Programme organised by Personalfn and the Ghatkopar Investors' Welfare Association (GIWA) on July 7, 2003. The meet, the first one of a series, was organised to promote investor awareness and kindle an environment of education through discussion.

The investor meet did not intend to pay mere lip service to investor education and was forthright in its approach. The seriousness behind the intent could be gauged from the speakers who graced the occasion viz. Mr G. N. Bajpai, Chairman Securities and Exchange Board of India (SEBI), who was the Chief Guest, Mr A. P. Kurian, Chairman Association of Mutual Funds in India (AMFI) and Mr Ajit Dayal, Chairman Quantum Information Services Ltd. (company that owns the brands, Equitymaster and Personalfn).

Mr G. N. Bajpai elaborated SEBI's role of the regulator in streamlining financial disclosure norms. Mr Bajpai disclosed that financial disclosures in India were among the best in the world. While it was not possible to totally eliminate corporate deception and fraud, at least SEBI was taking concrete steps to making that very difficult.

Ajit's speech could be summarized in one sentence investor greed and the role it played in fomenting many a stock market scam. Ajit opined that while scamsters were most certainly at fault for brewing trouble in the markets and eroding equity wealth, they could not have done it without a little help from the investing community. It takes two to tango or as Ajit put it you need both hands to clap, so investors instead of baying for the blood of scamsters need to do a little introspection and question their own role in fueling the scam. Ajit stressed that at the end of the day, investors need to tone their expectations and get more rational. They need to get over the frenzy fuelled by business channels that have their business models based on predicting the next hot stock.

Download Ajit's presentation on Investor Empowerment. (Powerpoint presentation)

Mr A. P. Kurian went on to outline the utility of mutual funds and how they had served the investor very well over the years. He stressed that with the exception of sectoral funds, mutual funds on the debt and equity side had outperformed benchmark indices. If you consider liquidity and disclosure norms for mutual funds, which incidentally rank among the best in world, the Indian investor could not get a better deal in any other investment avenue.

Mr Ravi Mehrotra, President Franklin Templeton Investments (who were the co-sponsors), concluded the meeting by summarising the essence of the meet in a nutshell.

As these gentlemen showed, the investor meet was certainly a good thing for the retail investor and its something he could use at frequent intervals. However, he needs to draw lesson from the insight and experience of such distinguished personalities and avoid repeating mistakes. This is something he owes himself.

If you attended the meet, do let us have your feedback. And in case you were not able to make it, do send us your ideas on how we can go about educating and 'empowering' investors.