(2) Absence Of External Pressure
It is one of the most important reasons for high stake of small traders or investors in stocks. Small investors or traders can make positions in securities with no external pressure.
It is due to the fact that they don’t need to outperform any market index or benchmarks. It is the main reason behind long-term view of small traders. This helps them to ride out short-term turbulence in stocks.
They usually try to maintain their positions until fundamentals don’t change significantly. Sometimes, small investors may also prefer to step back during unfavorable market conditions.
They may also wait for unique opportunities to accumulate good quality stocks at mouthwatering prices. Once retail investors got success in accumulating good stocks, they prefer to stay invested.
This stock trading strategy helps them to reap true long-term benefits.
[Read Also: 16 Tricky Ways To Identify & Pick Multibagger Stocks]
(3) Aggressively Marketed IPO Stocks
It is one of the most authentic reasons for high retail participation in stocks. New IPO’s are hitting markets every now & then. During IPO listing, stock analysts are eager to provide free & valuable stock investment tips.
These newly listed stocks provide a great platform to stock analysts to showcase their hidden talent. Once their views are published or telecast on popular media, it grabs the interest of general public.
Similarly, some highly reputed rating agencies or media houses provide buy rating for IPO stocks. They also provide daily updates for the amount of subscription reached everyday.
These aggressive marketing practices together with strong fundamentals can attract higher participation of general public. You should make sure that either you or your financial adviser looks for facts other than Wall Street researches.
You should never underestimate the significance of knowing business activities of company, its growth prospects, & reasons to invest in it.
Image Source: Shutterstock