Young Investors Changing Savings Avenue

There is a famous saying on investment by Warren Buffet "Price is what you pay. Value is what you get"

Earlier young professionals saving options were quite limited and even these options are directly related to risk taking capacity. As the time is changing, investment dynamics is also shifting, now they are exploring options other than traditional saving plans like Bank FD, Insurance or Post office scheme.

New generation understands the difference between investment and saving. You save what you left with after meeting all your expenditures. Investment, on the other hand, is done with a purpose to generate returns to meet out some specific financial goal in near future. Risk and Return are the basic cornerstones of the investment philosophy.The higher the risk, the better is the return. As the age increases the safe and secure approach takes over the risky and high return opportunities. Now a day’s young professional starting investment at the early age of 20-22. The changing psychology, Job scenario & lifestyle habits prompt individuals to explore the new age saving avenues.

We are hereby exploring few of the options:

Stock Market: Stock Market is one of the riskiest investments where investors take a risk in the anticipation of higher return in the long term. The earlier stock market is considered as speculation or gambling. However, nowadays as the knowledge about the market is increasing investors learnt the way how to invest. In-depth research is required to take the required stock selection or professional advisory is needed while taking the decision.

Mutual Funds: It is an indirect way to invest in stock market. It is best suitable for those who do not have much knowledge and exposure in stock market however they want to invest in shares.

Insurance: Insurance is not typically the saving or investment product. It ir originally used to ensure the afterlife calamities or anything related to health.But nowadays insurance also comes in a different format with the add-on features. For e.g Unit Linked Insurance Plans(ULIPs) invest the capital into the stock market which ensures higher return as compared to traditional Insurance plans, however, the returns are subject to market conditions & volatility.

Cryptocurrency: These are new age digital currency which independent and decentralized, nobody owns them, anyone in the market can produce these currencies using the process of Mining.Bitcoin is the first digi currency invented in 2009 by Satoshi Nakomoto.Since then it has been considered as "digi gold ".

Real Estate: Real estate in previous years has given tremendous returns to the investors. It requires lot of capital to invest in the real estate. However, recently introduced REITS(Real Estate Investment Trusts) allows small investors with as small a sum of Rs 2 lakhs, to secure units in exchange.It will be listed in stock exchanges.

Gold & Precious Metals: Gold is considered as a safe heaven. It has never came down to its historical prices and has multiplied the investors value many folds.Gold can be bought as a physical asset or even can be traded on exchanges to take the price volatility benefit.

Clearly, preferences and choices for the investment are changing now with increased market knowledge & exposure.

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