The investing landscape has evolved over the years. Speed of execution, infrastructure, transparency, and range of products have all improved. Although the last two years have been sluggish for the economy as Covid to businesses was like a tsunami to mankind but the post-Covid recovery could result in the emergence of many novel products in the market.

Although from an investor’s perspective, basic rules of investing haven’t changed (investments linked to financial goals — short term, mid-term or long term, risk-return relationship, aligning goals to the asset classes and expectation of a return which beats the market inflation) but the landscape has completely transformed. Conventional products like stocks, gold, real estate, bonds, mutual funds, exchange-traded funds, commodities, derivatives, bank/post office deposits continue to be available but they would now need to compete with more agile, differently structured products.

The technology disruption resulted in the creation of Wealthtech. Through the tech platform, transactions can be completed with a click of a button within seconds. Besides enhancing the transaction speed, it has reduced the cost involved making these products lucrative to invest in and with smaller denominations as low as Rs 100. Crowdfunding and P2P lending are emerging products in this segment. Equity crowdfunding is not legal in India but crowdfunding is available for donations. P2P is safer, regulated via NBFCs and retail investors can put money in these and earn handsome returns. The Indian market also offers angel network platforms where retail investors can come together and invest in the early stages of a business through an angel investor. It is getting very popular these days.

The financial crisis in 2008 in the USA manifested distrust in the financial system. A few years later, new technology in the form of blockchain emerged which resulted in the offering of cryptocurrencies (Bitcoin, Ethereum, etc). It is a high-risk product and due to the volatility involved, the majority of the middle-class population dithers from investing in it. Cryptocurrencies have a limitation because the Government of India is still debating their legality. The lack of central control, which was its USP, has somewhat become a drawback for them in India. Once a concrete framework is ready, you may consider investing in it. In the real estate sector, instead of investing in residential or commercial property, which is a big-ticket item, Real Estate Investment Trusts (REITs) are available. One can invest in REITs for a much smaller denomination, say 20 times smaller, with similar returns. Since no physical possession is involved, it reduces asset maintenance costs post possession.

Technology has also facilitated liquidity enhancement for assets as most of the assets can be possessed in digital form rather than physical. In the commodities metals like gold and silver have now been replaced by gold/silver bonds. They offer appreciation without the hassle of holding them physically. A win-win situation as there is no asset maintenance needed but returns are linked to the market rate. They are worth consideration as both these metals will appreciate in the long run. The current offering of gold bonds by the government also offers interest of 2-2.5 per cent on the bonds. Though gold’s appreciation is said to be linked to the rise in international oil prices, it has been seen that even when oil prices have dropped, gold has risen. Consequently, capital appreciation will also be good.

The list is not exhaustive as promising products are getting added for the retail investors but lack of information and resistance to change prove to be a deterrent. Fortunately, there has been an improvement in the investing infrastructure resulting in the elimination of information asymmetry. The regulatory environment is stringent for the investees making it investor-friendly. Investors can take huge benefit of this and pick-up investment products that fit their plan. Investment advertisements have pink piggy banks which represent fast growth but that could also imply the underlying greed so it is important to proceed with caution. After all, investment is one area where ‘one size fits all’ does not hold.

The author is a professor of Accounting & Finance

DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.