Why small investors suffer more losses as compare to Big Investors

Abstract

This project aims towards the study of reasons that causes more losses to small investors than big investors in the stock exchanges of the Pakistan. We choose this topic keeping in mind the crisis of stock exchange especially March 2005. Our market is included in the more volatile markets of the worlds, which at some time show heavy capital gains, and other time shows heavy losses to investors. Our market is declared best performing stock exchange, which has shown high capital gains to its investors and all investors were very happy from these gains but when they disinvest there money from the market suddenly the market has crashed and investors who has borrowed excess of there limits they suffers heavy losses and some investors has losses there original investment. Are they suffering due to wrong planning or some thing else? To identify forces behind it and role of Government, Security and exchange Commission of Pakistan, brokers and finally the most important the investors. A quantitative data is collected from various investors, who are trading in the Islamabad stock exchange (ISE), analysis of data clearly shows that small investors suffer more losses/less gains than the large one due to difference in their knowledge, funds, portfolio and access to current news.We hope this study will prove beneficial to people who want to invest in stock exchange and give an insight and comprehensive knowledge to shadow of business environment and keep eye on stock’s performance.