Central Depositories Services Ltd (CDSL) – one of the leading depositories in India has recorded about 20% approx. increase in new Demat and Trading accounts. As per the Securities and Exchange Board of India (SEBI), the majority percentage of the opening account is by youngsters aged 21- 30 years. They have been buying up stocks steadily.
What Encourages Youngsters?
- The main reason for such acceleration is the pandemic and lack of competing asset classes. It has prompted the hunt for new income streams.
- Growing online investment platforms in India have made investments easy which has also surged the demand, majorly among less experienced investors. Demat account opening procedure can be completed in 10-15 minutes only.
- The discounted or almost zero fees and easy demat & trading account opening procedure have encouraged youngsters with access to the stock market and its benefits.
- The trading account makes online share trading seamless on mobile platforms as well. Therefore, anyone can start trading on their smartphones anywhere and anytime.
What they prefer to invest?
In India, IT stocks have turned up as major winners during the pandemic and lockdown periods because of increased usage of digital services. Remote working due to social distancing measures has accelerated demand for digital services.
- Tech stocks and exchange-traded funds (ETFs) have recorded considerably increased flows.
- SaaS (software-as-a-service) companies and electric vehicle makers have recorded a 27% rise in their investors.
- India’s domestic stock market for retail investors
- Gold investments to find stability amid market volatility.
New investors are advised to start slowly with a diversified portfolio consisting of different asset classes. One should include equities, mutual funds, and fixed income investments for the longer-term to grow it gradually over time. Identify assets to make investments for the short term and long term.
It is good for youngsters to start investing early as you have time to create wealth. You can create a balanced portfolio for different life stages.
Youngsters have cracked the market mantra that will be helpful to take them to high places in this challenging profession of investing. Some of their approaches are –
The right mindset
The stock market should be approached to make profits with the right mindset. Stock Market can show both the pictures, profit as well as loss. One should be prepared for both and act according to the market indices.
An individual needs to make a few right decisions to be a successful investor. Believe in quality stocks over penny stocks. You can look at smaller businesses that have the potential to grow in the long run or the stocks of well-established companies. Youngsters prefer companies that are lesser-known and have minimum requirements for institutional holdings. Understand market-cap biases and sectoral importance in the economy.
Quality management can be assured by getting each information from annual reports of companies that you are considering investing in. Look at the promoters.
A professional approach
Investors are suggested to follow this investment approach by experts:
- Opt for goal-based investments
- Choose a mix of short and long term investments
- Evaluate the value of investment products
- Create an emergency corpus
- Set aside funds for retirement
- Buy insurance covers for yourself and family
Demat Account Opening Procedure
Share trading starts with demat account and trading account. One of the reasons that encourage youngsters to participate in the stock market is that the process of opening an account is so easy and hassle-free. You require your PAN card, income Proof, address proof, Aadhaar number, your passport size photo and signature. All documents should be in the digital form.
Keep growing and become a profitable investor with the right guidance and the right mindset.