Millennials should conquer their fear of stock investing and they should instead use their digital savviness to start learning how this asset class to achieve their financial aspirations, local stock brokerage First Metro Securities said.
“Often you’d hear they desire to gain financial independence by the time they reach 40, or, to some, even as early as 30. The wish list often includes being able to travel the world, spend worry-free and enjoy more-than-average standard of living for themselves and their family. But a great majority have no clear strategy on how to achieve this. And if ever they do, they tend to go conservative, not maximizing the opportunities and resources available to them,” FirstMetroSec business development head Andro Leo Beltran said.
Stock trading accounts are growing as online trading gains ground, but less than 1 percent of Filipinos are invested in the stock market.
“Although it is where one can significantly grow his money, we noticed that millennials tend to be apprehensive due to unfamiliarity, confusion and intimidation. We think this shouldn’t be the case, especially now that technology has already made stock market investing a lot easier and intuitive, especially for the tech-savvy millennials,” Beltran said.
Beltran finds it paradoxical that the supposed digital natives themselves have fears about stock market investing.
“If they can figure out how to shop or sell pre-owned items online without the help of a manual, they can surely handle an online trading platform. The concept is pretty much similar: Choose from a catalog the item (or from the listed securities the stock) you want to purchase; fund your shopping (or online trading) account; buy (or place a bid), and wait for the item to be delivered to your doorstep in two to three days (or wait for someone to sell the stock),” he said.
Just like online shopping, an investor has to do his research, Beltran said. If one reads reviews or compare prices before buying items online, one has to do the same when investing in stocks to avoid losing the value of one’s investment. Although stock investing has many benefits such as high returns, income from dividend and liquidity, there are also corresponding risks that may be due to market volatility and wrong stock picks, among others, he noted.
“That is why it’s crucial you keep yourselves abreast of what’s happening to the market and the company you wish to invest in. Most online trading accounts give investors access to their research and publications. They are there to guide you in making a smart investment decision,” Beltran said.
Based on Global Web Index, Filipinos are connected to the web over five hours daily, with nearly four hours spent on social media sites. As such, he said millennials could not use lack of time as an excuse not to know more about stocks.
“We’re not saying social media is bad. In fact, it can even help you get started into investing in the stock market,” he said.