A Study on the Relevance of Portfolio Management and Its Different Dimensions

Abstract

It is a universal phenomenon that the growth of the nation is not possible without the rapid industrialization. The necessary condition for sustained rise in per capita income is a sound and developed capital market. SEBI has realized that Indian capital market can not be developed unless and until retail participation is enhanced. In the absence of retail participation, the Indian capital market has to depend to a significant extent on FII inflows. Index of Mumbai Stock Exchange might have reached 21000 points twice, not because of strong fundamental of Indian companies, but due to the reflected glory of foreign funds. To enhance the retail participation in Indian capital market, SEBI has already implemented several stringent Corporate Governance rules. To win the confidence of retail investors, SEBI is simultaneously conducting several awareness programs. Due to privatization, liberalization and globalization, purchasing power of the common mass has gone up. Retail households which have huge amount of idle cash and are willing to earn a higher return from it but they are unable to do as they don’t have the adequate technical knowledge about the different capital market instruments. They have hardly any idea about where to invest, how much to invest, what is the ideal time for entrance into the market and when should they exit from the market. If they park their surplus fund into bank deposits, insurance schemes, post office deposits, derived return from investment will be abysmally low which is much lesser than inflation rate. Therefore it is high time for them to participate in the capital market provided they are ready to block their idle funds for the long term and they should invest in the stocks of different blue chip large cap companies of diversified nature. Thus investing in capital market is a win- win game for both the nation as well as the individual household investors.