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BSE, formerly Bombay Stock Exchange, has reached another milestone this year. The exchange now has more than seven crore registered users based on Unique Client Code (UCC). Similarly, the number of folios in the mutual fund industry is approaching 10 crore.
Tech-savvy investors
The growth of the last crore on the BSE is phenomenal, as it came in just four and a half months, while it took almost two years to go from five to six crore investors and almost three years from four to five crore UCC investors. investors .
The interesting thing is, the investor population is very young. In total, 62 percent of investors are under the age of 40, of which 24 percent are between the ages of 20 and 30. According to BSE, the growth has been led by tech-savvy young users, with an age profile of 20-40, who contributed 82 lakh of one-crore user additions from six crore to seven crore.
While these statistics indicate an increasing awareness of capital markets, it would benefit the system as a whole if the new entrants were given essential knowledge about the building blocks of investment and the risks of investing. To achieve this, all participants in market infrastructure institutions and intermediaries must join forces.
Investor awareness
SEBI, mutual funds, brokerage houses and exchanges regularly conduct investor awareness programs, but most are done through mandate. Most participants in such events are usually middle-aged or older. In addition, most such events are about successful investors or stock selection, but rarely about current trends or context. The need of the hour is to impart basic knowledge to potential investors from a much younger age, i.e. from the educational level, as organized by the College of Business at Michigan Technological University in the US.
The Husky Investment Tournament for students (grades 9 through 12) around the world provides virtual money to trade the market in real time. Michigan Technological University also offers scholarship programs for the winners (determined by portfolio returns) and prize money. Also in India we can look at similar competitions that mimic real-life investing. Students may be offered different sets of portfolio stocks and virtual money and asked for reasons for purchasing selected stocks. Another important lesson could be about using critical websites such as BSE, NSE and SEBI.
SEBI and the exchanges can also partner with leading business universities to offer scholarship programs to entice students. The NSE and BSE do have links with schools and certificate programs, but the course content may be made more attractive with the help of technology.
Brokers, for their part, may offer youth accounts such as that of Fidelity Investments, a brokerage account specifically designed to help children aged 13-17 invest, save and spend. When young market participants mature, it is not only good for them, but also for the whole market infrastructure, which is good for an emerging country like ours.
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