Millenials and the Markets – #3 by MarginCaller – General – Trading Q&A by Zerodha

I was just reading around to know the increased craze of markets around the world post-COVID and what I found led me to dig more into it.

It appears that COVID was not the only wave that was rising since its outbreak. The coronavirus outbreak stunned financial intellectuals when new and young investors started to enter the stock market and began to invest significantly. Millions of young Indians have taken to stock trading during and post the pandemic.

Basic stats:

Active investor accounts rose by a record 10.4 million in 2020, according to the data from the country’s two main depositories. Retail ownership in more than 1,500 companies listed on the National Stock Exchange of India jumped to 9 percent in the third quarter of 2020, the highest since March 2018.

India’s retail trading boom has been fueled by pandemic-driven restrictions and job losses that left millions of people at home with little to do. The relative stock market rally since March 2020 has drawn in more investors. The rally, probably one of the major reasons that attracted young investors into the market.

I do not really believe it was tough for them to participate as the new-age tech brokers have eased the complexity of entering the markets.

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Of the country’s total new accounts, the vast majority were opened by millennials aged 24 to 39, according to separate data from markets regulator, the Securities and Exchange Board of India.

What percentage of the market do they form?

The data shows this surge in new investors is being driven by young investors. Of the total users of BSE, 38 percent are in the 30-40 age bracket, followed by 24 percent in the age of 20-30, the stock exchange data showed. What is also worth noting is that the numbers of users with the age of less than or equal to 20 accounted for 5.9 percent as of June 2021, compared to 3.9% in May 2020 and 3% in January 2016. Source.

This just proves how the participation of young Indians has increased because of the pandemic.

An article by Forbes mentioned that the surge in the growth is due to the mobile trading apps that do all the required ease of access. Do not really find a way to not believe this, personally. Major stockbrokers in the country did not only see new accounts being opened, but the major chunk of the new accounts were between 20-30 years.

In a country, where there is still lack of retail participation in the financial markets, I believe this surge and demand driven by youth surely is a great start for a better and more involved industry in the coming years.

I was not one of those guys who started investing during the pandemic, but still the pandemic help me get my strategies and ways to work in the market right, and gave me an opportunity to learn and improve.

I am very curious on this topic to be explored more and will surely do. However, what do you guys feel about this trend and the Millenial’s participation in the stock market? Would it really keep increasing or was it a short-term bull market with such young investors?

Also, do write about the things that a millennial or a young investor should know while investing in the stock market.

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