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India has come a long way in these 75 years, many things have changed in terms of how we operate this also includes how we invest. From preferring to invest in fixed income instruments to mutual funds and stock, the investors have gone stronger and bolder. 

Indian investment landscape saw a sea of change since independence. In the initial years since independence, people had very little income and they preferred to invest those conservatively in gold, real estate and FD. 

However, much changed after the era of liberalization and globalization in the 1990s and, with that came certain regulations. It was also the early years of the Sensex and saw birth of an array of market-linked products like mutual funds, PMS, etc to channel savings. 

However, most investors stayed away from such products fearing that they will lose money if they invested in them after markets saw few major crashes orchestrated by Harshad Mehta, Ketan Parekh, and UTI. 

But again the investors started gaining confidence during the tech boom during 1998 - 2000. On February 11, 2000, the SENSEX crossed the 6000 mark and closed at an all-time high of 6006. But, many fraud companies attached a dot com at their end just to attract investors. Tech stocks were trading at relatively higher valuations, and the market needed to correct itself. 

Following this correction, when major fraud companies got exposed, the market crashed by 36.15% in just three months. The 2008 Lehman Brothers crisis was another time when the market saw another massive crash. Due to this most investors remained kept a conservative approach towards investment. 

Now from the early 2010s as the interest rates for fixed deposits dropped significantly, investors started thinking about market-linked investment seriously. 

And post COVID, everything about the market and investments changed.  On March 21 2020, the SENSEX tanked 31% from March 1 when the COVID-19 induced lockdown was announced. The market crashed laboriously as the foreign and retail investors went on a selling spree. Everyone wanted to cash out their money before the market could crash even further.

And this streak showed how matured the investors have become. When the markets went down, many retail investors put in money in the markets to mark stupendous gain, and this time most decisions were well informed ones. 

The most striking difference is many young investors today are invested in markets and market-linked products than fixed income products. 

 

 

Covid expedited the financialization of savings with ease of execution (via technology), democratized education (via social media), and transparent access for a common Indian to participate in India’s growth trajectory and not just be a witness.

Market cycles have shortened, skill redundancy, job obsoleteness, and evolving technology is questioning the very existence of every employee, the need for instant gratification is on the rise, so is inflation and hence equity (Post tax) has emerged as the preferred avenue to beat inflation.

Equity, today is no more an option but a compulsion if one needs to protect one’s money from erosion. Equity thus should form the core of one’s portfolio. But core needs to be safe, whilst equities are risky. There comes the dual shield of Good (businesses growing consistently) & Clean (ethical, apolitical, well-governed), protecting and growing hard-earned savings.

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