The numbers behind the global slowdown, the ‘soonicorns’

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The popular idea is that the market frenzy reached all-time highs last year. A flurry of retail investors joined the bull race, cryptocurrencies broadened their base, and NFT, or non-fungible token, became in some ways the word of the year. The latest YouGov-Mint-CPR Millennial Survey attests to these notions: half of respondents who invest in some way said they had increased their investment pool in the past year.

The pool of investors also fell from 67% in a similar survey in 2019 to 70% this time. This covers both financial assets such as stocks, bonds and mutual funds, and physical assets such as real estate and gold. The rich and young were more likely to increase their investment pool, the survey found.

The exuberance was driven by risk seekers, those willing to bear losses to maximize returns. About 52% of those who invested more were risk-seeking and 13% were risk-averse. It’s no surprise, then, that risky investing practices have grown in popularity: more cryptocurrency investments jumped from 7% in 2020 to 17%, while 14% said they had participated in bets via fantastic applications such as Dream11 and MPL.

There was also an increase in mutual funds and gold investments. But the trend towards new-age instruments is clear: pension and provident funds have lost their charm, as have bank savings. But more people saved in cash at home (30% in 2021 compared to 22% in 2020) at a time when cash needs are greater as three-quarters of respondents reported an increase in their monthly expenses.

The latest YouGov-Mint-CPR Millennial Survey surveyed 12,900 respondents in 206 cities. Conducted jointly by the India arm of global market research firm YouGov, Mint, and the Delhi-based Center for Policy Research (CPR), it was the sixth in a series of biannual surveys examining the aspirations , anxieties and attitudes of the Indian population. digital natives. About 45% of the sample were millennials, one-third post-millennials (aged 18-24) and the rest pre-millennials (40+).

Help with information

The Indian stock market has only gone up and up since the covid meltdown began. But booms are not uncommon; how this one swept the retail segment. The survey found that greater availability of information and investment tools such as new-age apps contributed to this increase more than market momentum or increased revenue.

Those who invested more last year were more likely to attribute it to new-age apps that made investing much easier.

Of the 29% of respondents who reported a drop in investment last year, 42% cited increased expenses as the main reason, while the rest attributed it to a drop in income or an unstable view of economy or markets.

Age difference

BSE data suggests that while Indian stock market investors have become considerably younger during the pandemic, the main push is coming from older millennials (those aged 30-40). Indeed, post-millennials (aged 18-24) are the group most likely to save cash, according to the survey. They are also the least likely to invest in stocks, mutual funds, gold, provident funds and real estate, but are relatively more bullish on cryptocurrencies. This trend has somewhat continued over the past two years.

However, this should not be interpreted as a lower intention to invest, as this demographic group has less savings than older age groups. On the contrary, young Indians are ahead of the curve to join the investment bandwagon. The average post-millennial in the survey began investing as young as 19 years old. The over-40 cohort did not start until age 32.

income generator

What determines the decision to invest more? Income emerged as the most important factor, more so than age, education, city level or gender. Nearly 74% of those earning more than 1 lakh per month were able to spend at least a tenth of their monthly salary on investment. This share was just over a quarter for those earning less than 20,000 per month. While 94% of high earners invested at least some amount, the share dropped to 77% for the lower end of the scale.

Last year, most respondents, across all income groups, were likely to have invested more than before. But here too, the share was much higher among those earning more than 1 lakh per month (68%) than those earning less than 20,000 per month (50%).

This is the second in a five-part series on data journalism about the experiences of Indian digital natives in the second year of the pandemic. The first part focused on the great turnover in the the job market Last year.

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