With access to digital means and tools, the investment world is no longer just for the seasoned pros. The youth – Gen Zs and Millennials – are leaning towards exploring more alternative investment options. Keep reading to understand how to invest and explore the available alternative investment choices wisely.
Top Choices for Alternative Investment
The digital generation, equipped with access to information and online platforms, increasingly embraces investment schemes offering transparency, flexibility, and long-term growth potential. Among the most preferred options are:
- Unlisted Shares on InCred Money
For millennials and Gen Z investors looking to tap into India’s thriving private markets, platforms like InCred Money have opened up exciting new avenues. InCred Money offers access to high-potential unlisted shares- making it possible for individuals to invest in emerging businesses before they hit the stock market. Previously reserved for institutional investors or HNIs, this asset class is now more accessible with a user-friendly platform, lower entry barriers, and curated opportunities. For digital-first investors seeking portfolio diversification and long-term wealth creation, Purchasing unlisted shares through InCred Money present a compelling option.
- Systematic Investment Plans (SIPs)
SIPs allow individuals to invest a fixed sum at regular intervals in mutual funds. This disciplined investment method helps mitigate market volatility through rupee cost averaging and encourages consistent savings. For young investors with limited disposable income, SIPs offer an affordable and manageable entry into the world of investing.
- Exchange-traded funds (ETFs)
These are passively managed funds that track specific indices or sectors and trade on stock exchanges like individual stocks. They are known for their low expense ratios, high liquidity, and transparency. ETFs appeal to tech-savvy investors seeking cost-effective exposure to broader market movements or targeted investment themes.
- Mutual Funds
Mutual funds collect capital from numerous investors and allocate it across a diversified portfolio of equities, fixed-income instruments, and other securities. Managed by professional fund managers, they offer a balanced approach to wealth creation, catering to various risk profiles. Their transparency and ease of access through digital platforms make them particularly attractive to first-time investors.
Smart Investing in Your 20s and 30s – The Gen Z & Millennial Way
The investment approach you adopt in your 20s differs significantly from the strategies prioritized in your 30s. Each decade presents distinct opportunities and challenges, making it essential to align financial decisions with evolving life goals, responsibilities, and risk appetite.
In Your 20s:
This is an ideal time to begin building a strong financial foundation.
- Take Calculated Risks: With fewer financial obligations and a longer investment horizon, individuals in their 20s are well-positioned to take calculated risks.
- Take Advantage of Compounding: Establishing early investing habits encourages financial discipline and allows investors to harness the power of compounding, a fundamental principle in wealth creation.
- Make Small and Consistent Contributions: Starting small with consistent contributions to instruments such as mutual funds, SIPs, or ETFs can yield significant returns over time.
In Your 30s:
As careers advance and personal responsibilities increase, investment strategies typically shift towards a more balanced and goal-oriented approach.
- Focus on Capital Preservation: While there may still be room for growth-oriented investments, managing risk and ensuring capital preservation becomes equally important.
- Refine Your Portfolio: This is the stage to refine one’s portfolio, align investments with long-term objectives such as homeownership, children’s education, or retirement planning, and consider diversifying across traditional and alternative assets.
- Form a Well-Structured Finance Plan: A disciplined, well-structured investment plan in the 30s lays the groundwork for future financial security and stability.
Alternative Investing – The Ultimate Investment Option for the Digital Generation
Today’s millennials and Gen Zs, widely living digitally savvy lives, want to invest beyond traditional options. With improved accessibility and tech-driven platforms, these alternatives are becoming mainstream. Reasons why Gen Zs and Millennials are choosing alternative investing.
- Higher Yields: Unlike traditional instruments such as equities or fixed deposits, alternative investments often provide exposure to non-conventional asset classes that may not be directly correlated with public markets. For young investors, this means access to opportunities that offer potentially higher yields, portfolio diversification, and a chance to participate in emerging sectors that align with their values and interests.
- Increased Accessibility: The accessibility of these instruments has also improved significantly with the rise of digital platforms, enabling investors to explore curated investment avenues with lower entry barriers and greater transparency.
- Strategic Portfolio Building: As financial literacy improves and risk awareness grows, alternatives are increasingly seen not as speculative but as strategic components of a modern portfolio.
Advantages of Alternative Investments for Young Generations
Alternative investments offer distinct advantages that align well with the goals of younger investors. Hence, these are some of the most preferred options today. Below are all the benefits of these investments:
1. Chances of Higher Returns
These investments often include niche or early-stage asset classes that, while carrying higher risk, may deliver superior long-term returns compared to traditional instruments.
2. Opportunities for Growth
Alternatives provide access to innovative sectors and private markets, enabling young investors to participate in emerging economic trends and industries before they reach the mainstream.
3. Options for Portfolio Diversification
By incorporating alternatives such as AIFs or REITs, investors can reduce overall portfolio risk through exposure to non-correlated assets.
Conclusion
With the wide range of alternative investment options available, today’s youth are more than ever drawn to making smart investment decisions. Based on their needs, goals, and wants, they should analyze their choices and make the best-suited investment decision.