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Below is the Views On How new-age broking is empowering today's youth?By Mr. Rohit Ambosta, Chief Information Officer, Angel Broking Ltd.
How new-age broking is empowering today's youth?
Millennials begun their professional journeys with the global economic recession, give or take a few years. The stock market crash was meant to have an impact on their investment habits as it made them wary of the investment instrument.Today, more than 10 years have passed since the financial crisis of 2008 and after millennials, even Generation Z has become part of the workforce in India and across the globe.This change in dynamics poses a question on the current scenario?
Well, despite being known for their ‘Carpe Diem’ lifestyles, millennials and Generation Z (in short, the Indian youth)are not trailing behind their previous generations when it comes to investing. As a matter of fact, millennials share the investment habits of their predecessors,as also pointed out by YouGov-Mint Millennial Survey. The surveyfurther suggested that post-millennials (or Generation Z individuals) are ‘least likely to invest’. However, this is also because younger generations are less investment-centricanyway.
Still, post-millennials were found tohave started investing by the age of 20 years, whereas the pre-millennials had doneit after the age of 25 years and millennials begun investing between these two brackets. To this measure, the Indian youth is already ahead of the game when it comes to investing. But why is this? Financial empowerment is one of the key factorsdriving the trend.
How New-Age Financial Products are driving youth towards investments?
Thankfully, the global financial crisis wasn’t the only thing that our youth witnessed in its early days of the professional journey. It also saw the market rapidly recovering as early as 2009 and reclaiming its all-time high by 2010. Both millennials and Generation Z have also grown up with rapid technological advances all around, primarily driven by smartphone adoption. It is interesting to note that the internet user base in India was around 5.5 millionduring the dawn of the new millennium. This figure had already grown by more than ten-folds by 2009, only to become 62.16 million at the end of that year. Today, it is around 627 million and – riding on the back of rural internet adoption – is still expanding with a double-digit growth rate.
The smartphone adoption has also given the Indian youth an atmosphere of avant-garde technological products and services. It is also easier for them to know the nitty-gritty of the market and how it functions. So, when theytaptech-driven products and services to take care of their investments, the trend is purely coherent. The awareness created by the internet has further empowered the youth to compare different investment instruments. This is why they are actively tapping tax-saving products like ELSS (Equity-linked Savings Scheme) alongside others.
For the uninitiated, today, the total number of retail investors in NSE is around 2.78 crores, out of which, 97.5 percent fall under the bracket of individual investors. Individual investors in the NSE have been increasing with a CAGR of 11% for the past ten years. The number of retail investors in BSE is 4.58 crores, registering a 26% YoY growth just over the previous year. This development is primarily because of the participation of Indian youth, who find it much easier to enter the stock markets with technological assistance. But why are they preferring equities against other investment alternatives?
To give you a picture, the interest rates of FDs range anywhere from 4 percent to 7 percent per annum – which is often towards the formerfigure than the latter. In contrast, the best performing mutual funds have given an average return of around 15 percent over the past year or more than doubleour GDP growth. Nonetheless, the day traders are able to realize this profit within a matter of days using their market acumen.
Given the rapid rise of tech-driven broking solutions, young investors don’t have to gain the expertise of a seasoned broker before they start to realize such profits. A range of cutting-edge technologies including Artificial Intelligence and Big Data are at their disposal to do the same. Many offer ready made products that dish up the advise and users can track performance and accordingly use these tools.Leveraging these technologies, ultramodern brokerage solutions are able to identify the upswings and downswings of the market before even seasoned traders do. Ultimately, empowering the investors to make informed decisions and, in the long run,make the most out of their investments.
Perhaps, this is why our young, tech-enabled youth is becoming more inclined towards the new-age investment solutions. Thankfully, it is bringing more retail investors to the market and helping it realize fresh all-time highs every now and then.
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