Here’s what millennials can do to make money from equity market

When the stock market was touching new highs in January 2018, Mumbai-based Vivek Mistry, 24, got tempted to invest in equities after completing his commerce graduation in 2017. He was keen to learn about investing in equities through experience.

But he didn’t have money to invest in equities. So, in March 2018 he borrowed Rs 1 lakh from his parents and invested in equity markets. That wasn’t his only mistake.

He decided to dabble in derivatives; he bought future contracts of some state-owned banks. But dismal state of state-owned banks (the news of the Punjab National Bank fraud perpetrated by now-fugitive diamantaire Nirav Modi had just been unearthed at the time) and the non-performing asset malaise in banks, in general, didn’t raise enough flags for Mistry who went ahead anyway.

Within two weeks of investing, Mistry lost Rs 50,000 as he decided to wind up his derivative positions. “I made a big blunder from my very first investments by trading in derivatives futures contract and not keeping a stop loss,” said Mistry.

When it comes to dipping fingers in equities, Mistry is not alone. For instance,, an online platform for equity investing, 40 percent of investors are under 27.

A smallcase is an investment instrument; each smallcase is a portfolio of stocks or exchange-traded funds that reflect an idea, theme or strategy. Smallcases platform can be found on brokerages like Zerodha, HDFC Securities, Kotak Securities, Axis Direct, Edelweiss and others.

Nearly 70 percent of stockbroking firm Zerodha’s customers are under 35.

Unfortunately, ease of technology doesn’t restrict youngsters from making crucial investing mistakes.

“Several millennial investors tend to follow the unprofessional approach like investing on random recommendations from friends / colleagues, following ace investors blindly, etc. while investing in equities and tend to register losses due to the short-term and mid-term volatility,” said Hitesh Chotalia, Head of Education at trading and investment institute, FinLearn Academy.

Stop listening to your friends; listen to professionals

One big mistake, experts say, that many commit while investing in equity markets is to listen to their friends, neighbours, uncles, aunts and everyone. Yet, we squirm when it comes to paying a fee for professional advice.

Pune-based Gaurav Kapoor, 25, followed a friend’s advice in October 2018 and invested his hard-earned money in penny stocks (those stocks whose share prices are less than Rs 10). He invested Rs 1.5 lakh after his friend had advised him to buy shares of small-sized companies on the back of expectations of rally in stock prices in this penny stocks.

But, in just two months, the value of Kapoor’s investment went down to Rs 25,000. He had learnt his lesson and later turned to a financial advisor who has now put him on a systematic investment plan of Rs 20,000 in a mid-cap mutual fund scheme.

Mrin Agarwal, financial educator and founder of Finsafe India said: “Most millennials don’t have the capabilities to analyse financials of the company, interpret the news. They often end up buying stocks on tips from friends / colleagues.”

Buy and hold is good, but learn to let go as well

An earlier Moneycontrol – CRISIL Research Ltd study published in January spoke of the merits of patiently staying invested through turbulent times.

The study pointed out that if investors who had invested in January 2007 in rising markets had panicked and redeemed in 2008 after the global market crash that happened on the back of credit crisis and had withdrawn at the end of 2008, investors would have lost 33 percent.

Those who had stayed invested till the end of the year of 2011, would have made a marginal gain of 4 percent. But if you had stayed on till the end of 2017, you would have made 16 percent. The study had considered the 20 largest equity funds at the start of 2007.

But that doesn’t mean you hold on to bad investments. Experts advise that when you buy equity shares directly, it’s better to have a stop-loss instruction in equities with a broker to sell a security after it reaches the price limit you had set.

Nithin Kamath, Founder & CEO of online stock broker, Zerodha said, “Having stop losses as a part of every trade will assist in being a disciplined trader without which some of the most common trading blunders will come to the fore. Stop losses need to be defined on a number of factors such as the maximum loss an investor is willing to take on a position, a risk to reward ratio, market volatility etc.”

Averaging stock price – not fruitful at all times

Often investors average the stock price by accumulating more quantity when the price of a particular stock from portfolio tumbles.

For instance, in 2017 Kinjal Shah, 25, residing in Mumbai decided to accumulate equity shares of Reliance Communications.

She invested on the back of reports that the firm was seeking a buyer for itself since it’s own debt levels were high. Her calculation was that if a suitable company acquires Rcom, the firm’s own share price would go up.

Happily, she started accumulating this stock at a price of Rs 32 per stock. The sale hasn’t yet happened, but in the meanwhile, Rcom’s share price has fallen to Rs 5.06 (as on closing price of 25th March, 2019). She kept on averaging the cost price by continuing with her investment in this stock.

She ended up investing Rs 50,000 and accumulated 1200 quantity of Rcom stocks. Shah says: “When I knew the company was not doing well. I should have not invested into it with certain assumptions or should have a stop loss while investing to reduce losses.”

CA Sameer Shah, CEO at Sameer Shah and Associates from Mumbai advised, “Millennial investor always needs to study the fundamentals of the company from annual reports, quarterly results and take a second opinion from research analysts who track the company before investing and accumulating the fresh quantity of the stocks.”

Mutual funds or direct equities; do SIP

If you don’t have the time or wherewithal to go through a company’s annual reports or cash flow statements, it’s best to stick to mutual funds. Numerous online platforms are available that help investors to invest in mutual funds.

Financial advisors and distributors also offer holistic financial planning to guide the millennials to invest across equities and debt.

Suresh Sadagopan, SEBI registered investment advisor and Founder of Ladder7 Financial Advisories said, “Millennials can commence investment if they are able to understand the schemes or else it’s recommended to take help of the financial advisor to identify goals and invest in a diversified portfolio analysing the risk appetite.”

Avoid the lure of direct plans in mutual fund schemes if you are just starting out. These are plans that facilitate investors to invest in mutual funds without any distributor in the middle.

Hence, direct plans come with a lower expense ratio as distributor fees are not embedded in them. Regular plans have distributor fees embedded in them as they are sold by distributors. But trying to save a bit of cost here and you risk of losing much more if you end up investing in the wrong mutual fund scheme by yourself.

But SEBI registered investment advisors can sell direct plans if you are opt for their fee-based financial plan; a much safer way to invest in equities.

Kamath said, “One of the easiest ways today to get started for millennials is SIP in mutual funds, more specifically index funds. It can be something as simple as a combination of Nifty 50 + Nifty Next 50 index funds.”

Financial experts say that as you gain some experiences and survive at least one market cycle, you can slowly consider part of your overall portfolio investing in direct equities after having exposure in index funds and mutual funds initially.

If I sell equity soon after I buy, I am gambling

A large section of investment population buys stocks in the morning and sells it in a day. This is called day trading and millennials should stay away from it.

Sadagopan said, “An investor in day trading might make money on one day and lose ten times the money on the next day. It’s not to be considered as an investment at all.”

Several millennials prefer taking a position in selected stocks for short term and plan to exit after achieving target price.

Amol Joshi, founder of financial advisory firm Plan Rupee Investment Services said, “It’s important to note that equity is affected by both micro and macro-economic factors. So, many things are not in control of investors while investing for a short period of time.”


Millennials are killing canned tuna, but the industry is fighting back

Bumble Bee Chunk Light Tuna in Oil

Geri Lavrov | Getty Images
Bumble Bee Chunk Light Tuna in Oil

Another one bites the dust. This time, millennials are killing canned tuna, according to a Wall Street Journal report.

Consumption of canned tuna has dropped 42 percent per capita from the last 30 years through 2016, according to U.S. Department of Agriculture data. And the industry places the blame on younger consumers, who want fresher or more convenient options.

“A lot of millennials don’t even own can openers,” Andy Mecs, the vice president of marketing and innovation for Starkist, said to the Journal.

The struggle of the three largest canned tuna companies, StarKist, Bumble Bee Foods and Chicken of the Sea International, mirrors that of others in the packaged food industry, like Campbell Soup and Kraft Heinz. Younger consumers are turning away from processed foods, and new competitors are catering to changing tastes faster than the industry’s giants.

To Ken Harris, managing partner at Cadent Consulting Group, the bigger picture is about convenience.

“In the last 15 years, can openers became passe,” Harris told CNBC.

Harris, who has worked with canned tuna businesses, believes that the traditional companies have fallen behind because it’s a low-margin business and investing in packaging falls low on the list of priorities. The main priority for canned tuna companies now, according to Harris, should be packaging that makes it easy to remove and drain the tuna.

StarKist started re-thinking its product line-up in earnest about three to five years ago when the decline of tuna accelerated, Mecs said in an interview with CNBC. He remembered reading a newspaper article a few years ago about millennials recoiling from cereal because the bowl had to be cleaned. For him, the story reiterated how much consumers care about convenience.

Upstarts like Wild Planet Foods and Safe Catch market their tuna as safer and higher quality and are slowly eating into the big three’s market share, the Journal said. According to Nielsen data as of October, smaller brands (not including private labels) control 6.3 percent of the market, up from 3.7 percent in 2014, the Journal said.

To stage a comeback, the traditional tuna makers are taking a page from those brands. Bumble Bee and StarKist both have premium brands that they market as sustainable.

They’re also focusing on the products that are working. Tuna pouches don’t require a can opener, and StarKist told CNBC that sales of its pouches are increasing by 20 percent annually. For the first time, the Pittsburgh-based company sold more pouches than their most popular can size in 2018.

Kroger’s Home Chef, a meal-kit company, has partnered with the tuna brand to put its yellowfin tuna pouches in kits next year.

Bumble Bee and StarKist have also turned to flavors favored by millennials, like sriracha.

Chicken of the Sea is pitching it to younger consumers as a snack. The San Diego-based company started selling resealable cups of its flavored tuna this summer.

Bumble Bee and Chicken of the Sea weren’t immediately available for comment when CNBC reached out.


Millennials’ favorite animal reveals key insights about their values

IG_RideOn[4]The “majestic unicorn” is trending, according to Hershey, with the company calling the animal “the spirit animal of millennials.”

“One of the things we started to notice that unicorns were popping up a lot in culture,” Bill Blubaugh, Hershey’s senior director of sweets & refreshments, told Business Insider. “Unicorns really now represent self confidence, individualism, the ability to achieve personal greatness.”

While the claim initially feels like a stretch, it’s one backed by extensive research at Hershey. The company is putting its money where its mouth is, with a new ad campaign for Ice Breakers starring – what else? – a unicorn.

However, instead of fantasy adventures, these unicorns are preoccupied with issues such as female empowerment in the workplace.

In the first commercial in the “Break Through” campaign, a young woman asks her apparent new boss for three weeks of vacation. When her boss says two weeks is the standard, she pops an Ice Breaker. A unicorn comes whinnying through the glass wall, inspiring the woman to tell her boss: “I’m not standard. Three weeks.”

In addition to four commercials featuring similar situations involving empowering unicorns, Ice Breaker unicorns are also taking over social media. Last Saturday (National Unicorn Day), the brand utilized “Twitter First View” to place a #UnicornMoment tweet at the top of users’ newsfeeds and debuted a music video starring a unicorn on Twitter.

Clearly, Hershey believes that unicorns represent millennials’ values, which translates into where they spend their money.

“We realized this is more symbolic of personal accomplishment, individualism, achievement, being your best, and really that your dreams can come true,” says Blubaugh. “And this generation believes that, certainly more than other generations.”

Ice Breakers Unicorn

Ice Breakers

So, not only is the unicorn trendy – it’s a representation of millennials’ state of mind and how they spend money.

The Ice Breakers ad is not the only indication that there’s a unicorn-centric trend brewing.

Polar Seltzer released “Unicorn Seltzer” as an April Fools’ Day treat, with consumers reporting the limited-time flavor was alternately fruity, vanilla-infused, and “like a nice version of the stuff they give you at the dentist once you wash your mouth out.”

More widely, the unicorn has been popping up in pop culture as a costume of choice for celebrities from country star Blake Shelton to future Bachelorette JoJo Fletcher.

Then, there’s the world of tech startups. A unicorn is a startup with a valuation of more than $1 billion – the subject of both celebration andcontroversy.

Even the scientific community is buzzing about unicorns. In March, the American Journal of Applied Science published a study that revealed the “Siberian unicorn” may have coexisted with humans. While this unicorn was certainly ambitious (surviving more than 300,000 years after they were thought to have gone extinct), they were far less aesthetically pleasing than the stereotypical unicorn, as it looked like a hairy rhino.

Objectively, Google Trends indicates that unicorns are hotter now than they have been since 2005.

And, more people are celebrating National Unicorn Day than ever. According to Hershey, there were 397 times as many mentions of National Unicorn Day on Twitter this year compared to 2015 – a fortunate boost for Ice Breakers, which both tapped into and encouraged the trend by promoting the hashtag.

However, at the end of the day, Hershey doesn’t necessarily need unicorns to be trending. Ice Breakers are already hot on their own.

The company reports the Ice Breaker brand has been an especially well-performing brand in both gum and mint categories.

IG_CantEven Ice Breakers

Ice Breakers

“We’re one of the strongest millennial brands in the category,” says Blubaugh. “The category, especially mints, tends to be a little older… We’re the new brand, we’re the young brand, and people become accustomed to us bringing them new and different refreshment experiences.”

Whether it’s trending or not, the unicorn will be a major presence in Ice Breakers marketing in the coming months. Expect the Ice Breakers unicorns to be popping up to confidence boosts on TV, as well as Ice Breakers’ Twitter, Instagram, and Tumblr, with more #UnicornMoments.


The ‘Uber for Friends’ Plans to Save Millennials From Loneliness

The 'Uber for Friends' Plans to Save Millennials From Loneliness

Clay Kohut’s pitch for his new app, Ameego, is so absurd that it’s best to let him deliver it.

“With Uber, you rent a stranger’s car,” he begins.

“With Airbnb, you rent a stranger’s home.” Mhmm.

“With Ameego … you rent a stranger!” What?

“It’s a logical progression,” he reassures.

The Texas-born developer and entrepreneur is, as you may have suspected, a full-on millennial, just shy of 26 years old. He’s a member of a generation in which “progress” follows slightly different rules. Upon sensing a problem – such as, say, the glut of young people who find themselves in new cities, without their old friends – Kohut and his cohort hesitate but a moment before deploying apps to solve it.

In the past month, this class of fresh-faced entrepreneurs has launched the buzzy Hey! Vina, an app that “helps women find new friends,” Bro, an ambiguous social-network-slash-dating-app for “men interested in meeting other men,” and Rendezwho, which connects distant people through a series of “Buzzfeed-style questions.” They’ve pitched start-ups with self-explanatory and slightly pathetic names, like “LykeMe” and “Woez” and “Go Find Friends.” They’ve attempted a “Tinder for meeting people” and a “Meetup for spontaneous get-togethers.”

Those last two failed. Ameego won’t, Kohut insists.

“We’re the first ones to commodify friendship,” he says.

Kohut will admit, if reluctantly, that not all things should be commodified. (In fact, his hope for Ameego is that, after a few hours of paid companionship, the professional friend and his client will become pals in real life.) But he also realizes, like any savvy entrepreneur, that he’s offering a service valuable enough that some people will pay for it. After all, what millennial hasn’t found herself friendless or flaked-on at some point, thumbing desperate texts to a BFF who’s still in Pittsburgh or Des Moines?

“I don’t think it’s at all clear that our social networks are larger or smaller than they have been in the past,” said Keith Hampton, the co-chair of the Social Media & Society program at Rutgers University. “But in general, people do report having fewer closer friends and confidants than they may have had previously.”

Hampton’s research focuses on the way that technology impacts our social relationships – or, in many cases, how it appears to but doesn’t. The recent spate of friend-making apps is a prime example of the latter. While these app’s creators frequently believe they’re fighting tech-induced isolation (“no one leaves their computer long enough to meet people,” Kohut explained to me) the case of the declining friend count is actually far more complicated than that.

For one thing, Hampton has found, people in affluent societies with strong safety nets tend to have fewer closer friends — which suggests that, as the US has industrialized and developed, successive generations have friended fewer people, probably without realizing it.

On top of that, our social networks have become less centralized, a change dating back to the aftermath of World War II. Where close ties were once based on strict geographic locations – a neighbordhood, an office, a church – people have become more mobile, and their networks both more individualized and more ambiguous.

Add to that the peculiar wrinkles of growing up in the aughts – an economy that’s kept many living with parents or, alternately, moving far from the people they know; a collapse of institutional power that’s left many without a local social hub – and it’s little surprise that 11 percent of adults aged 18 to 37 claim their relationships with friends don’t bring them happiness. Many belong to vast social networks, with ties that span multiple countries and life stages; but they don’t, on any given day, have anybody to hang out with.

It’s a paradox that the fast-talking, amiable Kohut has experienced himself.

“I was 19 when I dropped out, left my small town in Texas, and moved to New York,” he said. “If someone told me they could give me the ability to instantly make new friends, I certainly would have paid for that.”

Will anyone else? That remains to be seen; Ameego is currently available in New York and San Francisco, with prospective plans to launch more widely in the future. When it does, it will find itself up against not only other dedicated friend-making apps, but a whole range of millennial-marketed technologies that attempt to connect local strangers: MeetUp, Nextdoor, Mico, Skout, Yik Yak, Tagged, Tinder. In 2015, 57 percent of teenagers had met a friend online, according to the Pew Research Center.

Some of the Olds in the audience may tut at this: Can’t these kids make friends without their phones? But it’s not that social skills have declined or anything like that. It’s that digital natives are reconstructing online the meeting spots and adjacencies they don’t have in the real world. Already, some research suggests that people who use social media have more friends, and see them more frequently, than people who don’t. And Hampton, for one, thinks that further online connections between nearby strangers would benefit their communities and neighborhoods.

“When you build up local social ties, that has implications for collective action, community solidarity – even emergency situations,” Hampton said. “Whether those relationships begin online or off, it starts to solve some of the problems related to the loss of close social connections.”

© 2016 The Washington Post

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Tags: Airbnb, Ameego, Apps, Hey Vina, Social, Uber