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The Stock Market: What is Drawing People it Despite a Struggling Economy?

the stock market

The Stock Market: Brokerages are observing inflation in opening the accounts of new investors. In the previous four months, over 4 million people have opened new accounts in the stock market. Now, the total number of accounts has reached 44.3 million. Here are some of the reasons why we are witnessing the massive drive towards the stock market despite the economic slowdown, widespread job losses, and salary cuts (1).

Zero Charge and Easy Account Opening

The days are gone when people needed over 70 signatures to open a trading and demat account. These days anyone can easily open an account from the comfort of their home. The credit goes to eKYC and online brokerages. Even a simple Google search can lead people to massive search results for brokerages. They try to get people’s attention via various schemes, offers, and freebies. It includes promises like zero-broking fees, no account opening charges, or allow you to start trading in 5-minutes.

The Stock Market Rally

We are observing a sharp rally in the stock market, underpinning the new account openings. Since March, there has been a 40% rebound on both Sensex and Nifty. Many stocks that are part of broader markets are getting double in weeks.

The market direction is mostly upward since the march sell-off. It is because of the several measures taken by global central banks, notably the US Federal Reserve. It means that people have made handsome gains who have entered the market after March. Hence, they are prompted to invest more while also nudging others to join the market.

Improved Mobile Applications

In this era, we all have fast internet and smartphones; they have become omnipresent. Brokerages quickly took the opportunity to provide more user-friendly and intuitive trading apps. These new-age apps have become game-changers in the stock market.

There is also a trend going on among the investors to post snapshots of their market-to-market gain. It gives people an adrenaline rush to hike their wages while not giving much attention to the fundamentals of the market.

Access to the Stock Market Tips

Even though it is a risky element, it sounds like a driver, nonetheless. Several social media platforms are flooding with groups and people who are remitting investment tips. Many young people are drifting towards the stock market when they seek advice from these mediums.