Business

Introducing millennials to capital markets and creating a network of savvy investors

When compared to the overall population, there is a substantial disparity in equity investments in the country.

Currently, about 7% of India’s population has access to equity markets, compared to more than 14% in China and 65% in the United States.

With over 65% of India’s population living in non-urban areas, which are mostly untapped, this represents a big target market. This disparity can be narrowed via active engagement of people investing in various asset types.

In the past few years, the Indian stock market has been buzzing with investments from a wide range of investors.

One standout feature of a relatively rapid influx of investors in the stock market investments is the role played by millennials.

In the calendar year 2020, Demat accounts in India increased by more than 10 million. Young investors primarily drive the rise in investor accounts.

As this new cohort diversifies their investment channels away from the conventional low risk, low return generating assets, the overall increased interest of millennials in equities investing has the potential to expand India’s capital markets.

With cutting-edge technology, new-age stock brokerage firms are cultivating a community of savvy investors.

The following are the essential aspects that are assisting and hastening the community of knowledgeable investors:

Millennials are receptive to new-age technologies

Asset management, investments, security research, and portfolio diversification can all be conducted out using complex and sophisticated apps handled by a smartphone in the fintech revolution period.

Because of millennials’ openness to new technology, they have discovered creative ways to make their investments function and grow over time at a faster rate than risk-free assets.

Millennials make investment decisions on credible information

Before making an investment decision, millennials examine the legitimacy of information rather than relying on advice.
The availability of sophisticated tools (given by new age brokerage houses) that enable simple access to fundamental and technical research has made the total process of investment decision-making faster and more dependable than ever before.

The quality of investment services has improved significantly

In the last decade, the entire process of stock market investing has changed 180 degrees. AI and Blockchain have created numerous opportunities to improve the trading ecosystem, including faster settlements, real-time monitoring, greater insights, and enhanced security measures.
Furthermore, the transparency of operations used by brokers has assured that the highest quality of services are provided to their clients. It fosters higher trust among new-age investors.

Research and data related to markets, companies, and stocks is more accessible than ever

The overall availability and quality of information and research have increased at an unprecedented rate due to analytics. Millennials now have unrestricted access to primary and technical analysis and interpretation of such information.
Furthermore, a number of third-party services like 1) smallcase: a pre-defined basket of stocks, 2) streak: simplified technical analysis, 3) sensibull: simplified option trading, are now integrated by brokerage houses and offered to the clients to improve their entire stock trading experience.

Overall environmental (economic) impact

The low-interest-rate regime, along with strong emotions about the economy’s long-term prospects, is propelling the highly optimistic millennial investors.
This group of investors believes in the fundamentals of the Indian economy and takes a long-term view on stock market investments.
Even if there are uncertainties and volatility in the market, millennials may manage such risk using a variety of tech-enabled risk management solutions.
Summing up
Millions of millennials are accumulating investments in Indian stock markets using various mechanisms. This group of investors is significantly more educated and understands the volatility inherent with equities investing.
They are keen to expand their industry knowledge and make the most use of existing technology for obtaining credible information in order to make an investment decision.
This country’s community of savvy investors is projected to favourably consolidate the condition of retail investors and produce a complete generation of new-age investors who are unafraid of stock market investments.
The authored article is written by Mr. Prabhakar Tiwari, CGO, Angel One Ltd and shared with Prittle Prattle News exclusively.
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