Money maketh man
A Study Of Monetary Investment In A Rapidly Evolving Financial Landscape
Varad Srivastava, AIS VYC Lko, X A
Investing in the stock market was once considered the domain of the wealthy or those with financial expertise. In today’s changing economic scenario, the modern investor can be anyone with a smartphone, an internet connection, and the vision to make their money ‘grow’. Let’s understand the opportunities, challenges, and strategies that define modern investment avenues in India.
Rise of retail investors
Investing is the process of allocating money to various assets with the expectation of earning a neat profit over either a short or a long period of time. The new age mantra is: ‘Instead of merely working for money, make your money for you!’ And this reflects in the increasing number of retail investors in the country. By Jan 2024, more than 161 million investors were registered with the Bombay Stock Exchange (BSE), and over 5.4 million new investors joined the National Stock Exchange (NSE) that month alone. Association of Mutual Funds in India (AMFI) said that as of Jan 2024, 79.2 million SIP accounts (Systematic Investment Plans) were active through which individuals invested in various mutual fund schemes in India.
Navigating
investment choices
There are several financial tools retail investors can choose from. These include Mutual Funds, managed by professionals who source money from multiple investors to invest in stocks, bonds, or other securities. Then, there are Exchange-Traded Funds (ETFs), which are relatively low-cost investment options, or Direct Stocks, where individuals can buy and sell shares of listed companies directly. The govt and private sector also offer Bonds that offer stable returns with lower risks. More recently, Real Estate Investment Trusts (REITs) have become a viable option for those wanting to invest in real estate without owning physical properties.
Investing at your fingertips
The younger generation finds using online platforms extremely convenient for investing. Apps like Zerodha, Groww, and Upstox have a user-friendly interface and their minimal joining fees makes them accessible and affordable for the tech-savvy generation. In fact, the Millennials and Gen Z together constitute over 66% of retail investors. Interestingly, though investing was always considered a man’s domain, modern India’s women are not far behind. A 2022 RBI report reveals that women now represent 18% of the retail investor base, and this number is steadily climbing. Moreover, many financial platforms have launched women-focused investment plans for a secure future.
Need for investment
What has, perhaps, pushed the need for investment across the country is the benefit of building wealth and staying ahead of inflation. The economic downturn during crisis situations, such as the Covid pandemic, further highlighted the importance of emergency savings and mindful investing. This retail investment boom is a result of the concerted efforts made by both the govt and private institutions. For example, SEBI’s ‘Investor Awareness Programme’ and RBI’s ‘Financial Literacy Week’ have helped in educating individuals about the benefits and risks of investing. Private banks, wealth managers, and investment brokers also organise regular webinars, seminars, and large-scale events like the ‘India Investment Summit’, bringing financial literacy to the forefront.
As investment opportunities become more accessible, the future seems promising for investors around the world. Whether you’re planning for retirement, saving for your child’s education, or simply looking to grow your savings, investing offers the chance to transform sums into gains. However, the golden rule is: Know Your Risk. Before investing, it is crucial to understand and analyse personal financial goals and consult experts whenever needed. Big returns also mean big responsibility, after all.
