Knowing a fair bit about how money works is essential these days. Equipping oneself with the necessary amount of information regarding money matters go a long way. But there, however, is a considerable amount of anxiety and apprehension when people dare to enter into market affairs.
They fear market fluctuations and think that this is a gruesome affair which would always end up with them losing hard earned money. What they fail to realise is that if done correctly, the market has more to offer than you could have imagined.
Investor education is to tackle just the same dilemma. It focuses on issues that relate to the education and information needs of an individual who either considers participating in or boldly participates in financial markets. Adding to this, investor education has the ability to help investors assess the relevance and suitability of investment advice.
Any form of education has certain objectives to accomplish. Objectives of the investor education program are:
- To enable investors to comprehend market risks
- To aid outreach of financial services and products
- Informed financial and retirement planning
- Prevents investors from falling prey to fraudulent schemes
- Protects educators by informing them of their rights
Evident lack of financial literacy could lead to investment blunders. Uninformed investors are easy targets for scammers and frauds who aim to manipulate first-time investors. To actively participate in the initiative to protect investors, Securities and Exchange Board of India (SEBI) has adopted a multilingual approach so that language is no longer a barrier to understanding the clauses and fine prints of investment risks.
Investor education is a key to enhance investor protection and this, in turn, increases people’s trust in the market. This would consequently lure in more investors which serves well to a nation’s economy. And for a developing economy like India, investor education seems more like a mandate.
How can investor education be imparted to people?
In the digital era, this is no longer an issue. There is an endless array of portals available online that educate investors with key components of marketing at really affordable prices. Thus, investor web portals act as a single point of a learning resource. This is a portal for both existing and potential users of varied financial products that are introduced in the market from time to time.
Education could be also imparted via
- Media: This includes electronic, print and even social media, considering how far an outreach it has.
- The educational material could be provided to early investors in the form of guides, publications, books and articles.
- Meetings talks and seminars train young investors adequately in financial matters.
In conclusion, it is important to understand the significance of knowledge. It is common knowledge that without proper informational backing, one cannot make a sound decision. The same holds true when it comes to the financial markets also. Therefore, knowing about schemes that hold power to channel your money is not just a handy habit, it is a compulsion these days.