Investment trends in the 21st century - A guide for young investors

An investment expert was asked in an interview, “When is the perfect time to invest?” His reply was worth remembering. Replying candidly to the question, he said, “Yesterday!”

The vital message to draw from this quote that investment is necessarily a test of time & thus, patience. Any investment, be it as simple as a fixed deposit in a bank requires patience on the investor’s end. It is true that money attracts money, but it is important to understand that this process takes its own time. In today’s world, due to increased awareness about savings and investments, a lot of young investors have come into the fray.

This article is for these young investors, who are probably thinking of making their first ever investment. When it comes to saving your money, and making it grow, the market provides you with varied options, which can often lead to confusion in the decision making process. Before you make your first investment, here are a few investment trends of the 21st Century to look out for:

1. The banks are changing

Till the early 90s, banks were the easiest and most accessible institutions for common citizens to invest into. The banks at that time did not offer much options to their small and medium scale investors. The lay man always invested in fixed deposits and bonds, which would mature over a period of 1-2 years or more through which you could earn a fixed interest, ascertained at the time of investment. Today’s banks are different. Many nationalized banks are today well connected to different financial institutions in the country and abroad, and can thus offer you much better and diverse options to invest your money in. A few private banks also have their own capital funds, allowing customers to take benefit of these through schemes like SIPs in Mutual Funds. This change in the banking sector is certainly welcome and it is something that you should take into account, while speaking to your bank about potential investments.

2. Increased risk appetite

In the last two decades, it has been noted by many experts in the field of finance, that the risk appetite of the young investor has considerably increased. What this means is that the younger lot is more open to taking certain risks with their investments. It is often said, “Higher the risk, higher the growth”. This factor must not be misunderstood. Taking a risk does not mean losing your money. Increased risk appetite is understood as the ability to make investments in opportunities with greater stakes. The calculated, and conservative investor model is slowly eroding day by day. This is one of the main reason why young investors are also looking at adding real estate or land in their investment portfolio at an earlier stage.

3. Holistic financial planning

The addition of holistic financial planning is one of the key changes that has taken place in the last two decades in the investment sector. Each investor, especially the young ones are thinking of holistic financial planning, when it comes to their portfolio. Short and long term targets are set well in advance and investment are made to achieve each target or goal at different phases of life. A short term goal can be probably taking an international vacation or renovating the office. A long term goal can be creating a second home, or opening a new manufacturing set up. A sound financial advisor plays a crucial role to understand your short term and long term goals are assists you to invest accordingly. This holistic way of financial planning is much more organized, goal oriented and cohesive.

These are few of the many investment trends of the 21st Century. To understand these and other trends and practices related to investment, follow our blog. We regularly write about investments and try to educate our audience with the latest knowledge and opportunities.