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GenNow's investing mantra

The youth are finding the markets a comfortable place to make quick bucks, writes Venkatesh Ganesh.

india Updated: Feb 21, 2006 14:42 IST

Anand Ranganathan claims that his portfolio touched Rs 3 lakh in the year 2005. So, what's great about it?

Nothing, save the fact that he is only 18 months into his first job, is not an MBA from an IIM institute and is only 22 years old. This chartered accountant has built all of the impressive sum solely from the markets.

With the markets hitting 10,000 and continuing in its northbound journey, people like Ranganathan are making hay and the sun seems to be perennially shining.

The youth are getting into the markets in a big way and what is more they find it a very comfortable place to make quick bucks.

No risky business

Says Ranganathan, "Earlier, we were skeptical with regard to investing in the markets due to the lack of policing mechanisms, but in the last year or so things have improved despite the odd hiccup like the Roopalben scam."

Rekha Rajgopal who works with a leading BPO outfit in Mumbai echoes a similar sentiment. She admits that she is learning the ropes when playing in the market. And on closer prodding reveals that she has made about Rs 75,000 in the last year or so. No mean feat for an absolute rookie.

India has a unique demographic advantage due to a large army of young urban population actively participating in the country's economic growth and benefiting from the employment opportunities thrown up by a growing services sector.

This generation has markedly different habits, lifestyle and attitudes in comparison to other segments of the population. And among other things a major determinant happens to be their high disposable income.

As a result, there is a distinct shift towards high value consumption.

Growing appetite

The spending habits of the youth translate into a surge in demand for products and services of companies that are catering to this segment. Even the market has identified this trend and is accordingly tailoring financial products for this segment — a case in point being the Birla India GenNext fund.

"I have invested mostly in mutual funds and considering my risk-appetite, I am comfortable with the returns accrued," says Nirmal Biswas, a final year student of IIT Mumbai.

On the other hand, people like Ranganathan have a higher risk appetite and that shows in the returns. When it comes to stocks, Rangathan says that he entered through the IPO route and later sunk his teeth into mid-cap sectors.

Sensing a huge interest in playing in the markets, SP Jain Institute of Management & Research (SPJIMR) in association with Motilal Oswal Securities held Khoj 2006 -— an annual all-India B-School equity research contest. This year saw 100 entries from 48 B-schools.

"It gives an opportunity for MBA students to interact with top analysts in the Industry and understand certain aspects of the market," says Dipesh Singh from SPJIMR.