A NEW CROP OF INVESTORS – HERE TO STAY!

Naresh is 28-years old. Recently got married to his childhood sweetheart. They live together in a 1BHK, close to their work place and parents. Both are working from home and over the past few months, have realized that for the first time, they actually have surplus cash and some savings in the bank. Not too keen on tying themselves with the burden of a hefty EMI and most certainly not gold, they have turned to equity.

And they have made a decent amount of profit and are now advising all and sundry in their friend’s circle to invest in the markets.

Naresh is not an aberration – this is probably what a huge number of young, working from home, having some expendable income are investing big time in the markets. And it would be no exaggeration to say that these youngsters, beginners and millennial investors, stepping int the world of share trading are the one’s moving the markets. The sheer size of retail investors in the secondary and primary markets is mind boggling. Central Depository Services Ltd (CSDL) reported a 2.6 million increase in demat accounts since March 2020 – that’s proof enough.

There are some who follow the ace investors in the markets and there are some who do their own research. One thing common which we see in majority of these yuppie investors is that they prefer mid-cap and small-cap stocks are their perception is that large-cap give steady but slow returns. These are the ones who had put many beaten down small and midcap stocks back into the reckoning. Yes, there are many who have been trapped into penny stocks and even in some established stocks, following the advice of vested interests. They lost hefty amounts of money but took it as money paid to learn an important life lesson in investing.

The good news here is that these are not ephemeral investors – here today, gone tomorrow. They seem to be here for the long haul.

The pandemic has taught all of us very significant life lessons, some bitter and some sweet. But for these millennial investors, this has been a wake-up call, urging them to save and invest. And for our markets, nothing could have been better than this.