Millennials storming the stock market during pandemic. Here's why
There is a new surge visible in equity markets today. Many young investors, new to the world of investments, are transacting in shares amidst the pandemic. Read here to know what's making them click.
A sudden wave of young investors has started trading in the stock market despite the gloom of COVID-19 around. Typically, seasoned investors would seek buying opportunities in market downturns. But the coronavirus outbreak stunned financial intellectuals when new and young investors started to enter the stock market and began to invest significantly. Here's why.
Adaptive to new technology
Of all the generations, millennials have been more adaptive to new technology and finding new ways to accomplish their financial objectives. New investors between the ages of 20 and 30 are arming themselves with financial education thanks to technological tools and apps. With greater access to information, they are empowered to invest through investment apps and build wealth in ways that were not available in the era before machine learning and artificial intelligence.
With unparalleled digital access to financial information, up-to-the-minute analytics driven by artificial intelligence and machine learning, young investors find it easy to identify the right investment opportunities. Given the right tech tools, they are becoming savvy investors in a matter of hours. Instead of the years, it took their predecessors.
Additional read: How to start investing in equities
Instant access to trading platforms
With easy accessibility to databases, research tools and trading platforms, millennials have discovered a conducive stock market environment to start investing. In five years, the entire stock market ecosystem has transformed itself, making it more attractive to new and young investors. And with the rise of learning platforms and credible financial resources providing genuine research, millennials are equipping themselves with financial awareness and information like never before.
Ability to make decisions and risks
The new breed of investors participating in the stock market is more focused on making their own decisions regarding buying and selling shares. With a greater emphasis on stock market knowledge and various education platforms providing support, millennials are using the wealth of information to embark on their stock market journey.
New-age tech brokers
The stockbroking industry has seen a drastic change. Today, new broking entrants and reputed brokers have transformed their offerings and are providing specialized solutions. With access to sophisticated trading platforms, tailor-made suggestions and holistic financial planning at their disposal, millennials are in a prime position to make investment decisions.
From a hassle-free KYC compliance to a new account opening, any investor today can open an online trading and Demat account digitally from the comfort of their homes in just a few clicks. Besides, competitive broking charges and rates have further boosted their participation.
Additional read: Understanding fundamental analysis in equity investing
Due diligence in conducting research
Numerous research sites have gained popularity in recent times. Hence, conducting fundamental and technical analysis has dramatically simplified the task than it was in the past. Given the scenario, millennials conduct their own research through a host of genuine and credible information such as market data, fact sheets, charts, stock research and relevant information available through online tools and platforms.
Bullish about the economy
As millennials earn more and invest more in equities, they are likely to benefit from sustainable and long-term gains by investing for the long run. This recent shift in demographics may create and sustain a boost for the stock market. And as a more significant population of millennials join the workforce and given their ability to invest in equities, it could result in a bullish outlook for the Indian economy, businesses and markets for years to come.
Additional read: What you need to know about earnings season
Today, millennials no longer consider asset growth and judicious savings as good financial habits. Instead, they regard diversifying their investments, asset allocation and spending below their means as pathways to financial independence.
More and more millennial investors are becoming self-taught. This means they are willing to go the extra mile to access new information, evaluate investment opportunities based on facts, analyze real-time data instead of blindly investing in conventional investment options.
As more and more investors access the stock market, it could reshape the way young Indians approach investment.
If you are new to investments, explore the world of equities through a long-term plan. Invest your money that you're willing to ride for the next decade or more without turning to the stock market as a get-rich-quick scheme. Notwithstanding short-term market volatility, uncertainties and growing responsibilities make use of the many technological tools to help you level the investment playing field.
Disclaimer : ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. The contents herein mentioned are solely for informational and educational purpose. Investments in securities market are subject to market risks, read all the related documents carefully before investing.