Independence Day Special: How investment habits, preferences of people have changed over the past 75 years

As we are celebrating India's 75 years of Independence and India will mark is 76th anniversary on 15 August. India has progressed and so has the preferences in investment as income have increased. At least three experts tell us how they see the transition over the past seven decades. 

B Gopkumar, Managing Director & Chief Executive Officer at Axis Securities

In the last 75 years, with the introduction of new products and avenues of investments across fixed income, equity, and other alternative investment categories, the Indian investment landscape has changed significantly. The fixed income side has seen a significant deepening in both - government debt and corporate bonds.

The formation of SEBI in 1992 gave a fillip to shareholder protection and encouraged the growth of the Indian equity culture.

A transition from the open outcry system to the electronic trading system has made equity investments more investor friendly with the low cost of transaction and complete transparency to investors.

With traditional safety nets in the form of family support no longer as strong as before, investors must gain financial independence. The equity market is the best bet to achieve financial freedom. As per our observation, long-term equities offer higher returns than fixed-income products, though the volatility of returns in equities is higher compared to the fixed-income group.

Siddhartha Rastogi, COO and Head of Sales, Ambit Asset Management 

India and Investments both have seen a paradigm shift since independence. From a humble beginning where most had little savings, preferred, real estate, Physical Gold, and fixed deposits to protect and preserve their hard-earned savings.

Then came the era of liberalization, Privatization, and globalization, changing the direction, and facilitating the Regulation, Formalization & participation, bringing financial market-linked avenues like mutual funds, PMS, etc to channel savings.

Covid expedited the financialization of savings with ease of execution (via technology), democratized education (via social media), and transparent access for a common Indian to participate in India’s growth trajectory and not just be a witness.

Market cycles have shortened, skill redundancy, job obsoleteness, and evolving technology is questioning the very existence of every employee, the need for instant gratification is on the rise, so is inflation and hence equity (Post tax) has emerged as the preferred avenue to beat inflation.

Equity, today is no more an option but a compulsion if one needs to protect one’s money from erosion. Equity thus should form the core of one’s portfolio. But core needs to be safe, whilst equities are risky. There comes the dual shield of Good (businesses growing consistently) & Clean (ethical, apolitical, well-governed), protecting and growing hard-earned savings.

Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance

Planning your finances for the future is a must towards ensuring a secure future, because we can never be sure of what our future beholds. While many people learn about investments to park their money in, very few realize the significance of including health insurance in their finance portfolio as an essential measure to wave off the stress stemming from rising healthcare costs. The fact that medical emergencies can strike at any time without prior warning makes it imperative to have a comprehensive health insurance policy in place and ensure timely premium payments and renewals to ensure its continuity.

Having a complete healthcare insurance plan will also keep you and your family protected even during your post-retirement period as it will pay for all medical expenses, be it hospitalization or OPD expenses such as doctor’s consultation fees, prescribed diagnostic tests or pharmacy. Hence, it is vital to get a health insurance plan that fully covers healthcare expenses both inside and outside of the hospital. This is because an adequate health insurance cover will give you much-needed peace of mind and keep you and your family clear of the financial burden of life.