With people looking for alternative ways to earn money, especially with COVID affecting the economy, there has been a growing interest among people in the stock market. There are various social trading and investment platforms for guiding individuals to invest in the stock markets. Nowadays, even students have developed an interest in the stock market. Read Outlook Money’s stories on Gen-Z and millennials investing in the stock market, mutual funds and cryptocurrencies.
Accordingly, social investment platforms like StockGro, MyVoleo, Tradegyani have been designed to attract millennial and Gen-Z users to learn about the stock market investments.
Platforms like Stock Gro engage users in various mock sessions and help them interact with experts and community members to enhance their trading and investing skills.
“Opening a Demat account, doing KYC to investing in stocks or bonds may be a cumbersome process. Thus, a lot of people get confused and often stop midway,” says Ajay Lakhotia, founder of StockGro.
The platform makes the process easier for new users and provides them with virtual money on creating an account that they can use for real-time trading. Like gaming platforms, it also has leader boards where people could see the one getting maximum returns on investments. It also connects people to discuss investment ideas and trends like they do on social media.
“The definition of long-term investment has changed; people are switching from being passive investors to becoming active investors and chasing the momentum. Millennials are driving short-term investments, keeping their investments from a couple of days to a month. Moreover, as compared to mid-age professionals, students tend to check the market more frequently and spend long hours and are, thus, able to time the market better. Around 30 per cent of our users are B-School and college students,” says Lakhotia.
While StockGro is focusing largely on the millennial and Gen-Z people, there are various other platforms for investors across age groups and professional backgrounds.
Pros And Cons
There are a few pros and cons of these platforms, based on the investor’s profile. “People often don’t have an overall plan at all for investments. Without a plan, investing randomly is the biggest problem,” says Suresh Sadagopan, a registered investment advisor (RIA) under the Securities and Exchange Board of India (Sebi) and founder of Ladder7 Financial Advisories, a financial planning firm.
“The solutions on various social trading and investment platform are fairly generic and product-specific too. One needs to have a clear idea about their financial goals, like when they need the returns, what could be the risks and rewards, etc. They need to understand why and where they need to invest. These parameters vary largely from people to people, and generic solutions on social trading and investment platform may not help in that matter,” adds Sadagopan.
When a person has other financial commitments like spending on a child’s education, taking care of dependents, one needs to be careful before investing, he says.
“However, such platforms are a good start for young people who want to invest and have lesser financial commitments. Such platforms educate them financially and they can get a better understanding of investments,” says Sadagopan.
The bottom line is to be careful when it comes to stock market investments.
