How Motilal Oswal continues to garner the trust of lakhs of investors with its extensive research capabilities since 1987
In the last six months, more than 50 lakh investors have flocked to the stock markets with an objective to either create wealth or generate an additional source of income for themselves. However, as anecdotal history and data from multiple brokerage houses suggest, less than 20 percent of the traders make profits at the end of a year and an even smaller percentage of traders and investors beat the broader markets.
The reason? Most part-time investors and traders who try to make a quick buck in the markets lack the skills and time required to analyse stocks in detail before taking a position in the markets.
On the other hand, anybody seriously interested in creating wealth in the stock markets understands the importance of research and the efforts required for the same.
From day traders to value investors, serious stock market participants spend a large part of their day analysing market data, trends, and charts for profitable patterns and a host of other factors that could be leveraged to make sound investment-related decisions.
The most prominent example is Warren Buffet, arguably one of the world’s most well-known and successful investors. He has gone on record several times to attribute his voracious appetite for reading and research as a key contributor to his success.
“Read 500 pages like this every day,” Buffett once said while speaking to students, pointing at large books. “That's how knowledge works. It builds up, like compound interest.”
However, this is not feasible for most of the investors and traders who have their daily jobs and businesses to tend to, and for whom stock market investing and trading is not their primary source of income.
Take the example of Ritesh Gupta (name changed), a part-time trader who entered the markets in March 2020 after the crash driven by COVID-19. Well aware of the losses suffered by people while trying to trade the volatile markets themselves, Ritesh decided to make his investments only after consulting his personal stock advisor with a renowned full service broker.
“I have had friends and relatives being overconfident about their trading abilities after reading a few DIY trading articles and picking up a few indicators and ratios. They tried to minimise the brokerage by not taking the expert guidance of a full service broker, and ended up paying the price by making losses on trading,” says Ritesh. He has since been on a more profitable investment journey than many of his peers, thanks to the expert advice from a renowned full service broker.
Stock markets are complex, with multiple factors that drive a company’s stock price in either direction. This could include sector-related factors such as the current business sentiment, the announcement of the latest earnings, the time of the year or the point in the company's business cycle in which the stock is being analysed, and even the announcement of new management.
Apart from company-related announcements, there are macroeconomic factors that need to be considered as well. For example, RBIs’ announcements related to interest rates, monthly and yearly GDP expectations, changes in tax rates, announcement of relief measures and many other factors also affect the prices of stocks.
And this is where a common investor or trader needs a helping hand – to gather signals from all the noise and finally pick a few winners from over 5,000 stocks listed on the exchanges.
Quality research: The foundation of Motilal Oswal’s operations
Understanding how the market works and the various factors that affect a company’s stock price forms only a part of investment strategy while designing a portfolio that optimises profits. Mitigating risks and crafting the right entry and exit strategies are some of the other key skills for successful wealth creation.
And this is why it is crucial for part-time traders or part-time investors, who are often unable to commit the time and resources to building such a comprehensive knowledge base, to make investment decisions based on expert advice supported by outstanding research capabilities provided by full service brokers like Motilal Oswal Financial Services (MOFSL).
“When it comes to investing in stocks, it is very important to know what you are investing in and have solid reasons for doing so. Thorough research is key to building the conviction required to hold on to your positions to profit from the markets in the longer run. A lack of conviction stemming from superficial research, or acting on unsolicited tips from friends and family has led to the capital of thousands of investors getting washed away when the markets turn volatile,” says Ajay Menon, CEO (Broking and Distribution) at MOFSL.
Since its inception in 1987, Motilal Oswal has committed itself to providing its clients with research-driven expert advice related to stocks – a factor it believes is the key to wealth creation. The company's founders, Motilal Oswal and Raamdeo Agarwal, have embedded this single-minded dedication to providing superior advice and insights backed by intensive research into the company’s DNA.
With confident taglines of “Solid Research, Solid Advice” and “Think Equity, Think Motilal Oswal”, the company that boasts of an experience of over 33 years in the wealth creation industry has created a dedicated fan-following amongst serious investors and traders through its best-in-class research capabilities. The Annual Wealth Creation Study by Raamdeo Agarwal, also known as the Warren Buffett of India, is a yearly publication in which he outlines his learnings distilled from his illustrious career and his views on wealth creation. It is an event that all serious investors follow closely.
Apart from the clients who have entrusted them with their hard-earned money, what is even more important is the faith that the founders themselves have shown in their research. They have invested over Rs 2400 crore of their personal capital in funds run by the company.
“Research has formed the core of our existence since more than 30 years and we believe that no matter where the markets are – whether at all-time highs or all-time lows – and no matter what stance the broking industry takes, the common Indian man will always want and appreciate quality research and advice that helps him create wealth in the long run,” says Ajay Menon.
With this focused approach to providing well-researched stock advice to its clients, the company continues to grow its client base of over 11 lakh investors and traders who confidently rely on the company’s expertise to help them profit from the markets.
While its clients swear by the “Solid Research, Solid Advice” motto, Motilal Oswal continues to be recognised by the leaders in the financial sector for its research.
Research and advice – Motilal Oswal’s USPs
At a time when competitors in the broking space are taking the execution-only route for their offerings, Motilal Oswal continues to bank on its research capabilities and expand its research team with a firm conviction that the profits that such offerings can provide for its customers will justify their price.
The research team at Motilal Oswal consists of 30+ highly qualified and experienced research analysts who cover over 20 sectors and 230+ companies. The calibre of this research output can be ascertained from the fact that it is also being used by institutional investors such as Asset Management Companies – both foreign and domestic – to make their investment decisions. It is this unparalleled dedication to research that sets Motilal Oswal apart from the competition – which consists majorly of discount brokers who do not provide research or recommendations to their customers.
“Helping our customers profit with solid advice backed by intensive research is our core offering and we are proud of it. We continue to expand our research team which helps us come up with additional research offerings like ‘Basket Investments’ – one of which recently delivered a return of over 11 percent in less than three weeks”, explains Ajay Menon.
Extending the reach of its offerings through technology
While the company has achieved significant milestones in its journey and seen tremendous growth, its research-oriented approach continues to underscore its efforts in helping its clients maximise their profits through investments in the stock market.
To that end, Motilal Oswal’s conviction about research being the need of the hour is reflected in its decision to recently expand its team. It currently has close to 1,100+ advisors engaged in helping clients navigate the current volatility seen in the stock markets, and tap into new opportunities.
While Motial Oswal’s convictions around the power of research remain strong, technology has been a key enabler for the company to disseminate its research-based advice and insights to millions of customers in the blink of an eye.
To ensure the best customer experience and deliver their advice in real time in volatile markets, Motilal Oswal has recently launched a revamped version of its MO Investor mobile app which promises features like personalised research advice, ease of investments in multiple assets, single click execution and advanced tools for fundamental and technical analysis.
Irrespective of where the stock markets head in the near term, quality advice is always going to be in short supply and that is what continues to drive Motilal Oswal to deliver the most important ingredient of wealth creation to its clients as quickly as possible through their preferred medium – either through personalised phone calls, or non-intrusive recommendations delivered on mobile apps to maximise their clients’ profits from the markets.
To know more about Motilal Oswal and their services, click here
This is the second article in a three-part series. The next article will explain how Motilal Oswal enables people to secure a lifelong source of income by simplifying profitable intraday trading with the backing of Motilal Oswal’s advisors.