Although people go shopping during Diwali, many go for the investment. As traditional investments turn to physical gold (mostly in the form of jewelry) and other cash savings, digitally driven investment options are becoming the preferred choice of young people.
With technology making investing more convenient and transparent, tech-savvy urban youth are investing in investments in stocks (directly), cryptocurrencies, digital gold, unlisted stocks, global investments, real estate investments via REITs, peer-to-peer (P2P) loans, start-ups investing as an angel investor or via the VC / PE channel. Here are some investment options millennials might explore this Diwali:
There has been a significant jump in new investors to the stock market. It is estimated that a large portion of new investors are in the 20-30 age group.
According to an SBI report, the number of individual investors in the market increased by 1.42 crore in fiscal year 21. “A large percentage of millennials in India are still attracted to trading stocks in India. due to the ease of transactions and the continued rise in markets, ”explains Piyush Nagda, Head of Investment Products at Prabhudas Lilladher.
He said most millennials coming to digital investing platforms are between 20 and 25 years old and have been exposed to these options through digital payment platforms such as Paytm and Gpay.
If you want to invest on November 4 (at Diwali) in the stock market, do not miss the special hour “Muhurat trading” between 6.15 pm and 7.15 pm, considered as a favorable period.
Opening an account to buy digital gold is easier and faster than opening a bank account, says Renisha Chainani, research manager at Augmont. “Last year, Augmont saw the number of new user registrations increase by 3 times (even during the peak of COVID). In the case of Digi Gold (Augmont’s offering), we saw demand increase fivefold.
Digital gold is a hit among millennials mainly because it is convenient as an investment, one can invest digitally without any hassle and can buy pure 24K 999 gold with even Re 1.
The recent World Gold Council report states: “In recent times, new products such as Sovereign Gold Bond and digital gold products promoting micro-savings have had an impact on savvy urban investors.
Chainani said, “The demand for gold for this Diwali is expected to increase due to pent-up demand.”
Precious metals analyst Sanjiv Arole says investors typically revert to gold when stock markets go down, which has caused gold prices to rise. “With many central banks planning to set an expiration date for COVID-related packages, there will be some change in the behavior of the stock market from its current bullish behavior.”
Over the past three years, gold has given a 50% return, attracting short and long term investors.
Investments in silver have not gained momentum in India even though it has the potential (and the traditional association) to appreciate. “But if the purity factor was taken into account, things would be different,” says Arole.
Silver can only be a good investment option if purchased from a trusted seller. Chainani says: “Last year the demand for silver increased 2.5 times for Augmont.” Silver prices have also increased by over 60% over the past three years.
Cryptocurrency and NFT
Crypto was the talk of the town a few years ago, now NFT (non-fungible token) has taken the lead. Recently, there has been a good boost in India for these digital assets with more celebrities venturing there.
According to WazirX, the majority of its users are under the age of 35. “Young people see crypto as an alternative investment option. Bitcoin, which is referred to as digital gold by many, is one of the few assets to be seen as a hedge against the current uncertainty in global markets, ”said Nischal Shetty, CEO and Founder of WazirX.
“In India there is a culture of buying gold at occasions and festivals with the rationale that it can be used as a cover during the financial crisis. Bitcoin has been given the name digital gold due to the limited supply of BTC available. HODLers believe these features, combined with global availability and high liquidity, make it ideal for storing wealth for longer durations, believing that the value will increase over time.
Some crypto trading platforms allow users to start investing with as little as Rs100. Shetty says, “You don’t need to buy 1 whole Bitcoin which is worth around Rs 48.6 lakh. You can buy a fraction of BTC (or any crypto) for as little as Rs100. We have also found that many new investors can find order books and trading charts a little intimidating and difficult to understand. In April, WazirX launched the ‘QuickBuy’ option which allows you to instantly buy your favorite crypto with just one click. “
It is about investing in mutual funds through systematic investment plans (SIP) or lump sum. As of September 30, 2021, the total number of SIP accounts was 4.49 crore. According to data from the Association of Mutual Funds in India (AMFI), the number of investor folios rose to 11.17 crore as of September 30, more than double in five years.
Nagda says, “P2P loans are also gaining ground due to the increase in borrowing during the holiday season. Otherwise, most serious investments focus on market opportunities and are not tied to any holiday season. “
Under the rules, the P2P platform is not allowed to hold the funds invested by the lender or repaid by the borrower. These funds must be held in an escrow account, so that the platform itself has no access to the money.
(This is not investment advice and does not recommend any investment product)
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Posted on: Sunday, October 31, 2021, 7:00 a.m. IST