Millennials Investing in the Stock Market- A buzz or a trend?
December 15, 2021 by Vandana S · 3 min read
I started investing in the stock market at the age of 20. A small sum of 500 had doubled within a year. It was a 100% gain, more than any bank interest, bond, or real estate returns. From then, my investment in the stock market grew. Not just me, but a lot of my friends invest in the stock market. We all belong to the generation of millennials (Individuals born between the years 1981-1995).
Millennials have taken up stock trading during the time of the pandemic, either while they were bored or were just fascinated by the green and red points. Active investor account grew by 10.4 million, stock owning in NSE grew by 9%, the highest in the country. Brokers were overjoyed as during the last quarter of 2020, 72% of its customers had never traded before, were now active traders.
India’s race with China
India is the second most populated country in the world, has 3.6% investing in the equity market. In contrast in the USA, 55% of the people invest in the stock market. China has over 13% of its population investing in the stock market. According to a study, in 10 years, India’s market share will overtake China as its market is growing faster day by day.
Internet a boon for investing
The millennials are investing in the stock market due to the availability of apps, social media promotions, discount brokers like Zerodha, stock tipping chat groups, and Facebook, Twitter influencers. Due to the internet availability expanding to smaller cities and towns, many new investors are from cities outside of the metro cites. Many are shifting their investment in gold, real estate, bonds, savings to mutual funds and the equity market.
The ease of trading in apps like Zerodha has made the millennials realize the gains of the equity market. The ease of buying and selling stocks online, market analysis, and risk appetite calculation have made it easy for working individuals to divide their expenses and savings. Earlier the individuals invest for the long term, better gains, and larger risk appetite.
SIP (Systematic Investment Planning) has become popular among many working professionals. A small amount (Minimum 500 and 5000 for a lump sum) is invested every month and many use this money for future retirement plans, travel, and emergency fund.
Millennials investing in the stock market is driving up the economy and market capital. Not just in India, this trend is seen around the globe.
Do you think this is a trend or just a buzz due to the pandemic? Do let us know.