The Average Age Of Investors Is Declining: Nikhil Kamath

Sticking to large-cap companies will be beneficial for investors in the long run, according to the co-founder of Zerodha and True Beacon

By
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

At any stage of life, it is crucial to assess financial wellness and wealth management. Financial preparedness is a must which can help withstand any kind of prolong interruption such as a job loss. To reflect over these aspects, Entrepreneur India interacted with Nikhil Kamath, co-founder and chief investment officer, True Beacon and Zerodha.

Wealth Management & Consumer Behaviour During the Pandemic

According to Kamath, investors have become aggressive and most of them are accessing the market directly. Interestingly, the average age of users on Zerodha platform has gone down to 32 over the past few months. The ticket size has been INR 80,000 to INR 1 lakh per user who joins the platform. Also, there has been a significant spurt in the number of users who are joining with growth being 100 per cent month-on-month during the pandemic.

Emerging Trends In Investments

It is not unknown that a lot of investors choose stocks influenced by SMSes they receive. They often get influenced to buy something which they might not have planned. Kamath claimed, “We vehemently suggest people not to fall for these.” It is advisable for new users to stick to large-cap companies which have a track record.  The benchmark Nifty index has returned 10-11 per cent per year in the span of two decades. Sticking to this group of 50 companies with significant market caps is a better option to consider. People with reasonable expectations can definitely achieve long-term returns.

Risk Aversion For Regular Investors

Generally, the regular investors have wise decision-making and get better outcome. But at the same time, some people fall for inadequately governed companies in the ecosystem. Kamath said wealthy investors are allocating capital to good quality stocks in order to achieve diversification on their portfolio. However, the ones who are medalling with penny stocks or related stuff will move to better quality company in a course of time. In terms of capital allocation, residential real estate gets a chunk of ones savings. It yields only 2 per cent returns.

But, this trend is changing as young investors are entering the market and the notion of traditional investment has changed. Significant allocation in the equity market is coming from people in 25-30 years age group.

True Beacon & Zerodha: The Differentiator Factor

Zerodha has scaled in an incredible manner by being the effective platform for investors. Organic growth has been the differentiator factor of Zerodha. Kamath recalled that the idea of starting True Beacon evolved when he reflected over allocation of money in one of the banks few years ago. After realizing the intricacies of the fund management associated to it, he decided to eliminate all these inefficiencies. This was followed by removing the middle men and defining client-aligned business model. True Beacon has performed in an exceptional manner by changing the approach of asset manager.

Ecosystem Resilience And Business Plans For 2021

COVID-19 has expedited prevalent trends in the industry and everybody will be online. Kamath remarked, “Everybody will use technology and it leads to the need to evolve and remain agile.” Zerodha and True Beacon aims to evolve faster than competitors. He shared that after trading for 15 years, it is apparent that future of the market cannot be predicted. Tools are being worked on by the team of Zerodha to simplify the role of traditional financial planner.

Latest

How to Lead Calmly and Effectively While Your Business Experiences Growth

The co-founder and CEO of Komodor discusses his company's journey and his advice for entrepreneurs who find themselves in the spotlight overnight.

This Meta Leader Has Interviewed More Than 300 Job Candidates. Here are Her Pro Tips to Help You Nail Your Next Job Interview.

Meta's head of Global Environmental, Social, and Governance Business shares her dos and don'ts when it comes to the phases of a job interview.

This No-Code Platform Just Closed a $55.5 Million Round B

The co-founder and CEO of EasySend shares how his company creates digital customer journeys and his advice for entrepreneurs looking to break through the noise.

This SaaS Founder Sold His Business to Oracle for $9.3 Billion

In November 2016, NetSuite was acquired for $9.3 billion. Founder Evan Goldberg explains how it happened.

These Founders Started Their Company With a $300 Investment. They've Now Done $1 Million in Profits.

Watch this exciting episode of 'Entrepreneur Elevator Pitch' to learn about Canadian legging company Rose Buddha and see which hopefuls are able to land investor capital.

This Digital Campaign Celebrates the Fast-Growing Workforce of Web Creators

Elementor's VP of Marketing discusses the company's digital campaign and how web creators fit into the larger creator economy.

Watch the 60-Second Pitch That Landed a $500,000 Investment

Find out which companies impress our investors on another exciting episode of 'Elevator Pitch.'

Why This CEO Believes Entrepreneurship Is as Important to Learn as Geometry

Ayele Shakur shares her bold plan to make entrepreneurship education a requirement for high-school students and explains why business leaders should get on board.

How this Healthcare Entrepreneur is Disrupting the Fertility Space

The Founder and CEO of Inception Fertility shares how his family's road to parenthood inspired a brand that's making fertility treatment more accessible and the patient experience at the heart of what they do.

Can a Sex-Enhancement Product Score a $100K Deal in 60 Seconds?

Don't miss the new 'Entrepreneur Elevator Pitch' episode. Watch now!

Why This Company Is Providing Financial Services for the Blockchain Space

The co-founder and managing partner of Nexo shares how his company has expanded from a lending service to a 360-degree financial management platform.

Discover Entrepreneur Series

Whether you need advice on how to get your business off the ground or you’re just looking for inspiration, our video series have something for everyone. Browse our library below to find a series that speaks to you and your interests.

  • An original series streaming weekly where you can Click-to-Invest while you watch. THEIR JOURNEY. Your decision.
  • Your favorite pitch show is back with new entrepreneurs pitching Entrepreneur's investors.
  • Host Nicole Walters interviews small business founders to discuss their unique challenges and experiences running and growing a business. 
  • Jessica Abo covers the causes people care about, the powerful work they do and how they got to where they are in the first place.
  • Bestselling author, Ben Angel, takes his audience on a journey into the entrepreneurial mind to uncover why we do what we do through his powerful short films and educational videos so you can unleash your ideas and potential.
  • Watch our staff interview top entrepreneurs and report on location in these Entrepreneur.com exclusive videos.