PremiumRicher respondents invested a far greater share of their earnings than those who earn less. The risk-seekers led the rise in investment last year. No surprise that investment in risky assets such as cryptocurrencies spiked last year
The popular notion is that the market frenzy reached all-time highs last year. A flurry of retail investors joined the bull ride, cryptocurrencies expanded their base, and NFT, or non-fungible token, became by some counts the word of the year. The latest YouGov-Mint-CPR Millennial Survey attests to these notions: half of the respondents who invest in some manner or the other said they had increased their investment pool last year.
The pool of investors also grew 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 ones such as real estate and gold. The rich and the young were more likely to ramp up their investment kitty, the survey found.
The exuberance was led by risk seekers—those willing to bear losses to maximize returns. Around 52% of those who invested more were risk-seekers, and 13% were risk-averse. It’s no surprise then that risky investing practices gained more pull: more invested in cryptocurrencies, up from 7% in 2020 to 17%, while 14% said they participated in betting through fantasy apps such as Dream11 and MPL.
There was an uptick in mutual funds and gold investments as well. But the trend towards new-age instruments is clear: pension and provident funds lost charm, as did bank savings. But more people saved in cash at home (30% in 2021 against 22% in 2020) at a time of greater liquidity needs since three-fourth of respondents reported an increase in monthly expenditure.
The latest YouGov-Mint-CPR Millennial Survey covered 12,900 respondents across 206 cities. Conducted jointly by the Indian arm of the global market research firm YouGov, Mint, and the Delhi-based Centre for Policy Research (CPR), this was the sixth of a series of bi-annual surveys examining the aspirations, anxieties and attitudes of India’s digital natives. Roughly 45% of the sample were millennials, one-third post-millennials (aged 18-24), and the rest pre-millennials (40+).
Information aid
The Indian stock market has only risen and risen since the early covid meltdown. But booms are not uncommon; the way this one swept the retail segment was. The survey found that easier availability of information and investment tools such as new-age apps aided this rise more than market buoyancy or rise in incomes.
Those who invested more last year were most likely to attribute it to new-age apps that made investing much easier.
Of the 29% respondents who reported a decline in investments last year, 42% cited increased expenditure as the main reason, whereas the rest attributed it to a decline in incomes or an unstable view of the economy or markets.
Age differential
Data from the BSE suggests that while India’s stock investors have become drastically younger during the pandemic, the major push is coming from older millennials (those aged 30-40). Indeed, post-millennials (aged 18-24) are the group most likely to save in cash, the survey found. They are also least likely to invest in stocks, mutual funds, gold, provident fund and real estate, but are relatively more upbeat on cryptocurrencies. This trend has somewhat stayed for the last two years.
However, this should not be read as less intent to invest, because this demographic has less savings than older age groups. If anything, younger Indians are ahead on getting into the investing bandwagon. The average post-millennial in the survey began investing as early as at 19 years of age. The 40+ cohort hadn’t got going before they were 32.
Income driver
What determines the decision to invest more? Income came across as the strongest factor, more than age, education, city tier or gender. Nearly 74% of those earning more than ₹1 lakh a month were able to put aside at least one-tenth of their monthly pay towards investment. This share was just over a quarter for those making less than ₹20,000 a month. While 94% of the high-earners invested at least some amount, the share dropped to 77% for those lowest down the ladder.
Last year, most respondents, across income groups, were likely to have invested more than before. But here, too, the share was much higher among those who earn more than ₹1 lakh a month (68%) than those who earn less than ₹20,000 a month (50%).
This is the second of a five-part data journalism series on the experiences of India’s digital natives during the second pandemic year. The first part focused on the great churn in the job market last year.
