The Share Market and its New Generation of Investors

 Today's generations are way more aware of what is going on around them, not to mention that they are more independent. Long gone are the days when young adults asked their parents for an allowance. With several job opportunities - part-time and full, remote and on-spot – Gen Z is way ahead in the money-making race. In fact, a recent report by Bank of America report stated how those born between 1996 and 2015 are becoming the “most disruptive generation ever.”

Why is Gen Z moving towards the share and investment market?

The thing about Gen Z is that they are smart and fast – they want both comfort and money. As Gen Z enters the workforce and achieves financial independence and stability, the core influencers have found that very combination in the investment market. The share market and its everchanging dynamics suit the personality of Gen Z altogether, giving them the opportunity to earn some fast bucks in less time. Thanks to technology and the omnipresence of the Internet, Gen Z is more informed. This gives them the edge to look past the risks of investing and head into the race. Moreover, technology has made it easier for Gen Z to invest, buy or sell stocks with a click.

 

That brings us to the question – Is Gen Z treading onto the right path?

The share market is full of surprises if an investor knows what he or she is doing. To that end, here are the reasons why Gen Z enjoys investing in the equity market, and you would too.

Easy and calculated gains

The primary reason why investors risk their money in the share market is for the gains. Even the oldest of reports have shown how the share markets have always stood the test of time. Despite the prices of individual stock fluctuating on a daily basis, you are sure to earn gains over a period due to a rise in value.

So, the trick here is to invest in companies with stable growth – the ones that clock higher profits every quarter. You can also invest your money in sectors directly involved with our country's economy for an increased return value against your investment.

Hassle-free trading

With the Internet in the grind, the tedious process of stock trading has become a smoother mechanism, thus attracting the shortcut-loving Gen Z. There are several apps that let you scour through industries and company profiles with just a click.

These apps also let you monitor your investment in the stock market. What’s more, you can tread into the investment market at your leisure without it being a hurdle for your full-time jobs. And you know what that means - Salary plus share market gains!

Protection against inflation

Gen Z is into the investment market because they have found a way to secure their future without compromising on today’s luxuries. For savings and other modes of thrifting, inflation becomes a huge obstacle.

If the rate of investment matches with the rate of inflation, it means your gains become nil. However, most stock benchmark indices have been able to stay ahead of inflation. Therefore, if inflation is around 3-4%, share markets have managed to clock in annual gains of 10%.

Liquidity of assets

Gen Z doesn't like to have their assets blocked for a certain period. They want assets that they can turn into cash as and when they like. This is precisely why they flock to the share markets. Shares and stocks are liquid assets that can be easily converted to cash.

Moreover, unlike assets like land property or gold, or certificates, it is easier to find interested buyers in the case of stocks. This is why the average daily volume of transactions in a stock market is always higher than in a bank, meaning there are multiple buyers/sellers for a single stock.

The advantage of the economy

Since the share market plays a vital role in the booming economy of a country, it reacts to economic growth indicators such as inflation, GDP, corporate earnings, etc. This gives the new generation of investors a direct advantage of a booming economy to boost their personal gains.

When an economy is growing steadily, it leads to boosted corporate earnings, thus increasing the average income of an individual in the process. As consumer demand increases for a particular company’s stocks, the value of investment also increases.

A well-regulated and transparent framework

Unlike unauthorised investments, putting your money in the stock market is safer because a board regulates every share market index. This board is responsible for regulating the stock exchanges and protecting the rights of the investors.

Since Gen Z knows there is a backup guarantee of their interests being well-protected by a regulatory framework, they know they can avoid the risks of fraudulent activities by companies.

Flexibility to invest in smaller amounts

Gen Z loves to have everything in their control. They like things where the prerogative to choose lies with them. The share market has no hard and fast rule and lets you start with small investments. As a newbie, you can buy small-cap or mid-cap stocks. Again, you can choose to buy large-cap stocks in smaller units.

Since you can buy at your discretion, there is no compulsion to invest a specific amount every month. This makes it easier for Gen Z to invest whatever small amount they have or want to invest.

Getting an ownership stake in a company

When you invest in a share, you are practically buying an ownership stake of that particular company. Gen Z loves this sense of ownership. It gives them a sense of power since they can vote in a company’s decisions.

With Gen Z in the shareholders' benches, who also form the main customer base of most industries, company management is unlikely to make decisions detrimental to their interests.

Endnote,

Worldwide, Gen Z investors are shifting investing trends and economies as they continue to flock to the investment markets. Although the share markets have been thriving eternally, the current demographic of shareholders happen to Gen Z with the penchant for taking more risks than their older counterparts.

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