We live in special times. Never before in modern history have the financial markets been so accessible to so many people. Low-cost financial services and free, high-quality financial knowledge resources are available today for every person connected to the internet. This is a tremendous social and financial shift in a world facing income inequality.
In the past 18 months, we’ve seen a significant increase in the number of retail investors around the world, and growing interest in the financial markets. In the course of 2020, the general mindset towards retail participation in global markets changed. An entire generation realized that with new technologies at hand, they have more possibilities. This trend has accelerated further in 2021.
We see inspiring developments today in the FinTech space. We’re lowering the barriers to entry significantly, ranging from commission-free stock trading and fractional shares, easy access to cryptoassets to features such as copy trading. This will enable a new generation to experience investing early on, starting with small amounts of money, and allow them to gradually learn how the markets work and where and how they want to invest.
My passion for investing was ignited at an early age, following my father closely. Some people enjoy spending money, I love investing it. I’m also a big believer in putting your knowledge into practice. In an era long characterized by consumption, people now have the option not only to buy the products they love, but also to invest in the companies that make them.
Someone who decides to spend $50 on a certain product, can now also choose to invest that $50 in the company which produces it. For example, an avid Nike consumer who has been loyally buying the company’s products, can now explore the opportunity of investing in Nike itself, using the same amount of money that he would pay for a new pair of shoes or a hoodie. Another consumer, who appreciates the iPhone as a product, might consider investing in Apple shares. I can envision a different person, standing in line at the GAP store holding a new pair of jeans, contemplating whether to buy it or use the money instead to buy a Gap share. Another person might not be interested in spending thousands of dollars on designer clothes, but could still be interested in investing in Louis Vuitton, while others may not have the funds required to purchase a luxury sports car, but could still look into investing in Ferrari stock because they love the brand and this allows them to own a part of it.
These are all examples, and there are different criteria to consider before investing, but the vote of confidence that we, as consumers, give to a certain product is connected to its company, and every consumer should be aware of that. The relationship between an individual’s consumption habits and investment patterns is important and has interesting potential.
As the relationship between retail investors and companies strengthens, companies are making an effort to communicate their purpose, vision and future plans more effectively. Retail investors’ voices are now being heard in the markets, and they echo like never before.
Retail investors are more important to global equity markets than ever before. This growing importance is supported by structural investment changes, such as online community growth and free trading. TBanque’s ‘Retail investor beat’ survey highlights investors’ strong portfolio diversification, widespread crypto adoption, and the focus on inflation and valuation risks.
I had the pleasure of participating recently in the Fintech Blueprint podcast where I discussed these themes, and more. You’re invited to listen to the full conversation here.
I’m excited to be part of this revolution, and look forward to seeing how it will reshape our world in positive ways.
Yoni
Yoni Assia is TBanque Co-Founder and CEO
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking any particular recipient’s investment objectives or financial situation into account, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. TBanque makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilising publicly available information.
