Digital Transformation is Driving a Retail Investor Revolution
By Sponsored Post  •  April 27, 2022
Overnight, the pandemic changed how millions of people lived and worked around the world and two years on it is now clear that many of these changes will endure for years to come. Investing in the stock market saw a similar rapid transformation in 2020 with new retail investors enticed to take their first steps into stock market ownership, sensing a bargain as stock markets around the world collapsed, and covid restrictions forced them to stay at home with more time and money on their hands. It seems likely these financial market trends may well live on beyond the end of the pandemic too. Evidence suggests that this rush to stocks was not only driven by lockdown boredom, but also familiarity with the likes of Apple, Google and Microsoft as the pandemic altered our daily lives overnight and these businesses were viewed as beneficiaries of our future work and lifestyles. Many investors also saw an opportunity to participate in the stock market for the first time, looking to profit from the expected economic recovery. Online brokers have lowered trading costs, appealing to a new audience of retail investors Market accessibility has never been easier and with the appeal of lower trading costs, a broader and younger demographic have embraced new investment opportunities. Trading volumes for retail clients increased substantially in 2020 with mobile convenience, reduced complexity and access to global trading opportunities helping the retail investment boom spread across the world. The US remains the preferred destination of choice for these investors given the depth and breadth of capital market opportunities there. US markets had already demonstrated significant outperformance leading up to the crisis - equity markets outperforming global markets by a staggering 270% since 2010, as shown in the chart below. Household names in the tech sector, in particular, delivered on product innovation leading to consistent market share and profit gains. This performance was undeterred by the pandemic with our shift to a greater reliance on technology bolstering these trends. Apple’s revenues and share price both grew by over 30% in 2021 while Google’s Alphabet’s shares rose by over 60% with revenue growing more than 40% over the same period. US stock markets more broadly have also benefitted from generous shareholder remuneration policies in recent years with markets reaching new record highs in 2021 as a result. Reducing portfolio risk through diversification The start of 2022 has brought new challenges and uncertainty. Rising inflation, Russia’s invasion of Ukraine and China’s continued regulatory crackdowns have investors naturally questioning their outlooks for the year ahead. It’s likely many will choose to stick with companies they are familiar with and have confidence holding long term. Naturally, these usually end up being companies on home turf. However, a well-diversified portfolio, which will have exposure across different asset classes, sectors and markets will be more resilient to market swings. This can help cushion portfolios against losses and improve returns over time. As retail investors become more sophisticated and look beyond their home markets, interest in international stock markets as a means of portfolio diversification and risk mitigation is likely to increase. In Singapore, where traditional investors typically favour home securities, Google searches for “US stocks” began to see an uptick in 2021 compared to 2020. The future remains bright for retail investors Traditional investment methods may still be relevant for successful portfolio outcomes but with real time data, access to global markets, in depth analysis and low commissions, retail investors now have fast and efficient ways to trade that were previously only available to industry professionals. So whilst there are clouds over the near term economic outlook, the forecast for a new generation of individual investors remains bright.
Tiger Brokers (Singapore), the Xiaomi-backed online trading platform, has launched its inaugural lifetime zero commissions campaign for unlimited trades on US stocks for users. The Lifetime Zero Commissions for US Securities rides on investors’ demand for access to US financial markets. Approximately 87% of Tiger Broker’s account holders currently trade US securities, and they have been seeing increased investor interest in US markets amid increased volatility globally. Through this campaign, Tiger Brokers hopes to lower the barriers to investing and make it easier and more efficient for Singapore investors to access global markets through their platform. To learn more about the zero commissions campaign or open an account, click here:
This advertisement has not been reviewed by the Monetary Authority of Singapore. Any views shared with Prospective Clients (“Prospects”) are suggestive in nature and on a sample basis only. This may also be predicated on assumptions that are made by Tiger Brokers (Singapore) Pte Ltd about the Prospects’ investment objectives and risk profile. Our suggestive and sample views extended to Prospects are not to be considered as recommendations made by the Company. Suggestions provided are also based on information that may be shared by the Prospects, the accuracy and comprehensiveness of which Tiger Brokers is not in a position to verify. Tiger Brokers (Singapore) Pte Ltd (herein "Tiger Brokers") may, to the extent permitted by law, participate or invest in other transactions with the issuer of the products referred to herein, perform services or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereof. The information herein is for recipient’s information only and not an offer to sell or a solicitation to buy. Any date or price information is indicative only and may be changed without prior notice. All opinions expressed and facts referred to herein are subject to change without notice. The information herein was obtained and derived from sources that we believe are reliable, but while reasonable care has been taken to ensure that stated facts are accurate and opinions are fair and reasonable, Tiger Brokers does not represent that it is accurate or complete and it should not be relied upon as such. The information expressed herein is current and does not constitute an offer, recommendation or solicitation, nor does it constitute any prediction of likely future stock performance. Investment involves risk. The price of investment instruments can and do fluctuate, and any individual instrument may experience upward or downward movements, and under certain circumstances may even become valueless. Past performance is not a guarantee of future results. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any person or affiliated companies. Before making an investment decision, you should speak to a financial adviser to consider whether this information is appropriate to your needs, objectives and circumstances. Tiger Brokers assumes no fiduciary responsibility or liability for any consequences financial or otherwise arising from trading in securities if opinions and information in this document may be relied upon.
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