The pandemic has brought millions of new investors - first-timers, the young and women - into the market, and the trend still continues, said Akshaya Bhargava, founder and executive chairman of fintech firm Bridgeweave. He was formerly CEO, Barclays Wealth and Investments, CEO, Infosys BPO-Progeon and country manager, Citibank Czech Republic. Excerpts:
Why there is a sudden rush of individual investors into the markets?
I think the pandemic has been a golden period for self-directed investors because they had the time to engage with stock markets. Investors are certainly better informed and have a greater inclination to undertake their own research than before. They spend quality time researching to understand the functioning of the markets. I see this as a secular move and a great thing that happened for the markets and for investors in general. Easy access to markets provided by the likes of Paytn Money is also helping.
What is the profile of these new investors?
They are all sorts of people. But most of these new entrants are first-time, young investors and these young people have a different view to risk and are prepared to be more adventurous. Having young people come into the market early on in their lives is fantastic for the industry. They are a unique community who tend to rely more on their friends, peers and their own knowledge than traditional channels such as advisers and brokers.
Are individuals now putting away extra money for investments? Also, what are they investing in?
We find that people are making small bets, to begin with, and then investing bigger amounts in stocks that they understand. A lot more investors have entered the market so the market has more money now. There is a big shift in asset classes and equities and crypto have replaced mutual funds as the dominant investment class, especially among the new generation of investors.
How does your artificial intelligence (AI) tool offer predictive ideas to investors?
InvestorAi is an artificial intelligence-driven tool that offers predictive ideas to help investors decide on investments. This tool uses AI models to provide research and investment ideas to individual investors, advisers and asset managers. It tracks collective investor trends like which is the most popular stock, how many people looked at it, which is the best performer in a sector and which is most tracked so far, and the like. Currently, InvestorAi has over 21,000 users. We will soon be launching a similar product for investors in crypto markets.
Bridgeweave must be analysing a lot of data, investor behaviour and tracking trends. Give us some insights.
Using InvestorAi, Bridgeweave analyses 4,600 global stocks and performs millions of calculations on a daily basis. One of our models looks for stocks that show a high probability of delivering at least a 3% return in the next 30 days. Recently, this algorithm showed us 9 stocks in the U.S Technology Mid Cap sector with such signals, indicating a sector move taking place in the market. Similarly, the other day the same algo has shown a downward move in the Indian non-bank, small-cap stocks.
How much do people invest on average?
We find that people are making small bets, to begin with, and then investing bigger amounts in stocks that they understand. We are also seeing many people using InvestorAi to track companies and gradually taking larger and bigger positions as against rushing into IPOs.