Many young learners have been involved in equity investments since the stock market crashed in March 2020 in the wake of Covid. Checking the Sensex has become a morning ritual for them, just like social media. The slump in the market has excited these youth like the offers of e-tail companies. They can find themselves filing income tax returns, but are comfortable entering buy orders at limited prices on their broker’s app.
“Is IRCTC stock currently overvalued?”
“Should I apply for Paras Defense IPO?”
“Why are Chinese stocks rallying? should I buy?”
These are some of the questions that pop up on a WhatsApp group called ‘Financial Information’ created by people over the age of 20 to discuss investments. In addition to memes celebrating ITC stock rallies or buy-on-dips (market corrections) of back-to-back opportunities, profit-and-loss screenshots and links to news articles have been shared here.
Many Gen-Z investors (aged 25 and under), a growing share of retail investors, told TOI that they make investment decisions by citing financial reports, news articles, podcasts, and opinions from the growing online community. Advice from ‘investing friends’ is another major factor that influences decisions such as which broker to choose and when to sell stocks.
Freelance copywriter Pragya Dutta (25) allots a few hours every month to look for underperforming stocks and buy them if she feels they have sustainable long-term growth potential. “I buy stocks only when I am convinced by the logic behind the ‘buy’ call in an analyst or news report,” said Pragya, who started investing last year.
Manjari Satam (24) entered the markets earlier this year after leaving her job as an actuarial analyst. “I feel sad when I see how low prices were last year. However, I have seen 16% returns this year, which is good as most of my savings are in FDs, earning only 5%,” Manjiri said. Both Manjiri and Progya said they don’t buy stocks out of hand, but instead use ‘watchlists’ with price alerts that pop up in their notifications.
Despite their relatively low initial capital (usually between Rs 50,000 and Rs 2 lakh), many youngsters understand that compounding will help them grow their money and hence intend to stay invested even after the pandemic.
“Investing helps me keep track of what is happening around the world. I like to read about different sectors, try to see trends, and then buy stocks,” said 24-year-old Neil, who runs a homestay business in Alibaug.
The social media platform Reddit has become a popular discussion platform for novice investors. Forums like IndianStreetbets and IndiaInvestments have seen a surge in followers amid the pandemic. Posts in these forums range from “rate my portfolio” to “how to plan an exit strategy”.
Austin Thekkanath (25), a member of IndianStreetsBets, who recently quit his job to pursue an MBA, does his own research. “I’ve tried technical analysis, but it sounded like astrology to me,” he said. Austin, who has been investing since late 2019, aims to build a retirement corpus.
Another 18-year-old Reddit user, who is an engineering student, started investing with small savings from his allowance and cash gifts in February this year. “I look at what makes a company better than its competitors and how it adds value to people’s lives,” Kishori said on condition of anonymity. “The idea is to build wealth and not try to get rich overnight,” he said.
The influx of smartphone-owning Millennials and Gen-Z investors has increased the share of trades done via mobile on the BSE from around 6% in January 2020 to around 18% by August 2021.
Market veterans said the new generation investing behavior is more mature than the previous ones due to easy access to expert advice and the ability to monitor portfolios.
Dinesh Thakkar, CMD, Angel Broking, one of India’s largest stockbrokers, told TOI that the tech-savvy generation has grabbed the opportunity given the intuitive apps of the brokers, as the saving can be managed in such a way. There was no other option but to put in assets that could earn better returns. Compared to FD.
“As age is on their side, they would like to take calculative steps towards building wealth. They don’t take time to understand how to protect themselves from market volatility or how to take advantage of it. There are many experts on social media. We have also created a lot of nudges and educational programs,” said Thakkar.
The average age of clients added by Angel Broking in January-March 2021 was 30 and 75% of all trade orders were placed through its app.