Mr. Prabhakar Tiwari, Chief Growth Officer, Angel One Ltd
The Indian Capital market has witnessed a rapid transition from physical to digital in the past few years. There has been an emergence of several digital platforms offering advanced brokerage services at the touch of a button. Some of the legacy brands have also transformed to become digital-first players, which also captures the physical to digital shift. As companies scaled up their digital platforms by integrating advanced technologies like Artificial Intelligence and Machine Learning, investor participation also increased over time.
New-age investors were looking for better investment avenues, as traditional tools like FDs or savings or real estate weren’t offering much profit. Since the stock market was offering better returns and digitization had also made investors confident about investing in the capital market, there has been a rise in retail investors in the market. The ease of doing investment has attracted GenZ and millennials from tier 2 and tier 3 cities and beyond as well.
The Evolved Notion of Investment
With extensive use of technology in the corporate world and so many other aspects, the demand for the skill sets of tech-savvy newer generations has increased manifold. The traditional asset classes provide a lower rate of return today and hence investors often look forward to investing in various other avenues that can provide a higher return even if it means taking slightly higher risk.
Offerings for Young Investors
Data is the new Oil. This has become true in Investments as well. Rule-based investing, also called “Smart Beta”, which uses algorithms and analyses data to find the right opportunities to trade are fast becoming the go-to products. The rule-based investment tools bypass trader biases and human emotions from the trading process, which was the central theme of actively managed funds. This method of investing is showing higher promise than the historical methods of investment through Fundamental and Technical analysis. Rule-based strategies add an element of reliability away from human emotion and bias to make the investment journey more process-oriented.
The demand for and the possibility of time-tested strategies has given rise to rule-based investment psychology. Back-testing algorithms on the historical data of asset performance and trends help find the best investment strategy in the uncertainty of the capital markets as seen in 2016 and subsequently in the recent pandemic. The brokerage function has also gained a new dimension of providing the investor with a spectrum of resources for customization to discover their investment strategy. These are the digital-first platforms that offer minimal brokerage fees and features such as pre-defined strategic indicators and trading bots to automate the trading experience for amateur investors.
Innovative Financial Solutions are the Future
As the capital markets are diversifying and attracting more investments, there is an immense need for decentralizing the investment ecosystem. Opening up access to money and participating in its management will also help build a financially literate society. An intelligent investor will always adopt newer technologies that make economic transactions simpler and lesser complex. The inclusion of intuitive engines has made phenomenal progress but is nowhere even near its full potential. Agile optimizing strategies prepare investors to be on top of market conditions even in the worst market conditions, with a diversified portfolio ensured by risk-management solid systems.
Final Thoughts
Technology is revolutionizing the average user behaviour by making them smart and responsive to change triggers. This is a possible time to invest in Smart Beta products for a time-tested and proven investment logic. It allows instant gratification by removing friction in the investment products while enabling a swifter experience with a simulated interface. Today’s economy is increasingly pivoting on quality and research over cheap services. People are ready to pay premiums for the worth of their efforts and services.
This news was shared to Prittle Prattle News via press release.
