Whilst India’s economy begins to dwindle as a result of the 2019 Coronavirus pandemic, millennials all over the world have decided to take advantage of this situation and direct their energy towards studying the stock market in India. This has paved the way to more millennials investing in India’s stock market, thereby helping India’s economy to thrive during such uncertain times. In this article, we elaborate on the data proving these trends.
Although the focus point of this article is directed towards Indian millennials in specific, an increase in stock purchases has been reported because of stock investments made by millennials from all over the world. It must be noted that this data is taken on an average. Millennials, reportedly, have been labelled by older generations as a smart breed. Living during turbulent times, they have grown stronger whilst staring in the face of widespread adversity. In the current day, statistics specifically point out that amidst uncertainty with regards to company performances, millennials continue to prove their risk loving nature by actively participating in making investments in the stock market. In comparison to the 2008 market crash that crippled the economy and the rates of stock purchases, this statistic is exhilarating. (Do you feel the goosebumps?) To put things in perspective, it was only until after the 2009 elections (about 12 months later) that investors began to steadily pick back their stock purchase habits.
The pandemic, in particular, created an atmosphere of frustration and worry. Rumours of the inability of companies to pull themselves back up permeated through the air at a rapid pace. Foreign institutional investors began pulling out of their investments and selling their shares despite some of them being vintage and standing steadily. This, however, did not prevent Indian millennials from taking the leap of faith in the Indian stock market. During this period, there was a 70% increase in the creation of demat accounts, 80% of which were created by millennials. Mutual fund investments initiated through systematic investment plans reached an all new high.
The initial pandemic duration witnessed large scale investments being placed in shares belonging to blue chip companies. Many youngsters, according to certain surveys, explained that they began embracing and following a risk loving attitude because of the safety net that the internet provided to them. Equipped with instant access to information on the stock market and zero brokerage, young investors have actively decided to slowly conquer the Indian stock market and make it their fortress. With information ready to be accessed with the click of a few buttons, all queries can get answered immediately. As a result, learning about the Indian stock market became easier.
Supporting the accumulation of evidence on the increase in interest surrounding the Indian stock market particularly by millennials, Angel One released a statement on this as well. This firm deals primarily with the trading of securities and research that relates to it. The firm established its base in 1987 and provides Indians with a trusted source of information on good investment opportunities. According to this securities firm, out of the 510,000 individuals that opened accounts to trade stocks, 72% had never traded stocks before. These statistics were derived from the October to December 2020 period. As shocking as this statement is, a follow up statement was also made that grabbed the attention of many investors in India. While 12.7% of China’s population invests in equities, only 3.7% of individuals in India invest in the same. Given this fact, it is appalling to think of how many millennials have united together to indirectly save India’s dwindling economy by trading stocks and investing in other financial instruments.
In India, discount brokers such as Zerodha Broking have become very popular within just the past year. With an increased amount of time on every millennial’s hands because of the work and study from home transition, these millennials have decided to spend a large chunk of their free time studying the Indian stock markets. Most of this study is conducted over inexpensive or free online platforms such as Youtube and Telegram. Following some strategies and tricks by listening and taking notes from stock market professionals on Youtube and joining stock update group chats on Telegram, this platform has gathered a large consumer base over this uncertain time period. Cheap trading applications also provide these youngsters with the ability to get a hang of stock market volatility and how to combat certain staggering stock trends.
To conclude this article, we have decided to provide you with a few strategies that beginners in the Indian stock markets have followed for successful returns.
Confirmation Bias
Falling prey to confirmation bias is very common amongst newbies in the Indian stock market. Confirmation bias refers to the tendency of an individual to find information to support their expectations. Reinforcing opinions through this method can result in the pertinent investment taking a hard hit.
Free Stocks
With very little money to invest with in the beginning, trading for the first time can be quite worrisome. For beginners, a lot can seem to be on the line if one investment, regardless of the amount, begins to fall. Bearing this in mind, newbies in the stock trading arena tend to invest in free stocks. In the world of trading penny stocks, it is quite easy to stumble upon free stocks. Many dishonest promoters hide behind these stocks to allure fresh traders as a means of getting money easily. A note to bear in mind: Penny stocks refer to stocks from small companies that trade for very little to no money.
Media Articles
It is important to understand the role of the media before making a stock trading decision. Many fresh traders tend to read articles on the internet and make decisions on which companies to buy shares from. It is absolutely imperative to bear in mind that stock related articles found on the internet are written based on information in the past, not the future. Investing in stocks requires an individual to keep up with news relating to the company they wish to invest in and predict how the stock market will react to it.
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