• Institutional Investors – They are already known to public as they are registered entities.
• Big Individual Investors – This category of investors are either well aware about market and if they need, they could get expert's service.
• Informed Investors – There is small critical mass of investors. They are educated and informed.
• Amateur Adventurers - This group of people primarily composes of new entrants. They are energetic, ambitious and semi- literate in the art of investment. Their arithmetic has, generally, been found poor. Mostly they trade. Many among them get excited when there is an IPO. They are part of rumors – sometimes as generators and most of the time as victims. Small percentages among these investors qualify as Informed Investors and many disappear either as Absent Investors or run away.
• Absent Investors - These people mostly own shares purchased through IPOs. Due to peer pressure or 'follow-the-crowd' syndrome or other reasons, they line up for IPOs, get some shares allotted and become completely absent. Some among them once purchase shares from secondary market too, keep the certificates in the bank locker or below the pillow and disappear for a long-long time. Number of investor-wise this group is large, however, total investment amount-wise they may not be that big in size. Those who do not collect divided for several years belong to this category.
In the market, Institutional Investors, Big Investors and Informed Investors do their business without making big noises and the last type, the Absent Investors are absent anyway; hence the group of Amateur Adventurers makes all noises in the market. The vibrancy in the market is due to their necessary/unnecessary acts and actions. This vibrancy may or may not take the index up or down, but it certainly brings life in the market.
Source: Mr. Rajesh Sharma. Facebook
