Everything You Need To Know About Becoming A Retail Investor.

The essential tools you need and benefits of becoming a retail investor.


Retail investors are people like you and me, ordinary folks who wake up one day and decide we want to try our hand at profitable investments. Maybe we have a little extra cash lying around, or we want to put our wealth to good use rather than blowing it on unnecessary expenditure. A retail investor is a non-professional, amateur, or even a newbie investor who enters the world of trading opportunities like securities, mutual funds, or the stock market.

Who is a retail investor?

A retail investor is someone who indulges in the trading of mutual funds or stocks of publicly listed companies (equity shares). They are also known as individual investors and are most commonly the average consumer who buys and sells commodities for his/her own personal profits. They are non-institutional investors who generally trade in relatively small amounts.

Steps to become a retail investor

Fill your knowledge gaps 

As a retail investor, there are numerous knowledge gaps to be filled. The very first one is of course, to understand the best avenue for investing depending on your familiarity with the investment world. In long term investing, mutual funds are recommended for beginners. With mutual funds, you can earn an ROI of 9-12%. However, if you want to venture into the stock market, you need to know all about public listings, about getting share allotments of high performing IPOs, and about the risks and rewards involved in both Mutual Funds and the Share Market. 

Essentials tools needed to invest

Mutual Funds

Mutual Funds don’t need any special account to trade in. All you need is a basic bank account and appropriate documentation. Here are the basic tools required

          • Bank account
          • PAN Number
          • KYC (Know your Customer) documentation

Stock Market

Trading in the stock market requires a set of special tools namely, 

Demat account

A demat account is where your purchased shares are kept in an electronic locker and attached to your account. Also known as a ‘dematerialisation’ account, it holds shares and securities of publicly traded companies. 


A broker is either a human or a platform interacting between you and the exchanges (Bombay Stock Exchange BSE and National Stock Exchange NSE). A few years ago, broking was done manually, and stock investors approached human brokers. But recently, automated, electronic brokers have become popular and highly sought after by regular day traders. The most popular broking companies include Zerodha, Upstox, Angel Broking, and 5 Paisa. Brokers levy charges and taxes on transactions that you make with them. Depending on the broker you choose, you need to understand the various charges they apply. For instance, most of the popular brokers charge up to 10% of your profit depending on the number of transactions and percentages. Even if you make a loss, you will still have to bear the broking charges.


A retail investor is a non-professional, amateur, or even a newbie investor who enters the world of trading opportunities like securities, mutual funds, or the stock market.

Benefits for aspiring retail investors – What’s in it for you?

  • Retail investing is a more profitable option than stowing away your extra cash in a savings account. 
  • It is beneficial for wealth creation since it improves the money you already possess.
  • It is a better alternative over being a retail consumer since holding company shares will give you higher rewards instead of just being a paying customer. 
  • Since inflation is growing each year, becoming a retail investor will give you the opportunity to grow your personal wealth alongside growing inflation. 
  • Retail investing offers the highest percentage of returns if done right when compared to all other methods of investing.



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