Kshitiz Bhutani, a media professional based in Mumbai, has recently tasted success in the stock market. As a first-time investor, much of what Bhutani has learned about trading and investing in shares is not through the traditional routes like brokers and financial advisors, but via YouTube.
And he is not alone.
Many young professionals—working from home for most of 2020—dabbled into stock markets this year, spending the time and money they saved on office commute and other leisure options on investing in shares. During the pandemic-triggered lockdown between March and July, a record number of new investors entered the Indian stock markets.
Apart from the lure of high returns and the availability of tech-savvy discount brokerages like Zerodha, these investors were nudged by a new breed of social media influencers on apps like YouTube and Instagram. These influencers regularly share stock market tips and investment strategies in simplified language.
“Creators from genres like music and comedy have had their time, now the trend is changing. The finance genre has been on the rising side and if we go by the current viewership trends, it might leave behind certain table toppers (genres) very soon,” said Subrat Kar, co-founder and CEO of Vidooly, an online video insights company.
The YouTube channels of influencers in the finance space have seen massive growth in subscription in recent months with each of their videos getting millions of views.
Cutting through jargons
What makes these new financial gurus special is their ability to remove the jargon from stock market investing. “For someone like me who is starting from scratch, these YouTube channels are very helpful as they explain all concepts in layman’s terms,” Bhutani tells Quartz.
Rachana Ranade, a chartered account and former teacher with over 1.4 million subscribers on YouTube, says that she makes videos in a manner in which even a school kid can understand. “This ensures that the content is complete and easy enough and can be understood by the masses,” Ranade says.
For instance, in a video that has been viewed over 919,763 times, Ranade untangles the concept of derivatives by comparing them to payback points cards. “You gain points only when you swipe your debit or credit card. The value of the points increases when your underlying debit or credit card spends increases. So payback (card) derives its value from underlying asset which is a debit or credit card,” explains Ranade.
Prasad Lendwe, the founder of FinnovationZ.com, a YouTube channel with over 1.3 million subscribers, says the idea to start a platform for explaining stock market jargon came to him when he was pursuing his MBA in finance.
“I got several queries from my classmates about stock market investment. I realised that the regular academic process does not quench the thirst of the students. This also got me to YouTube as I thought that this would be a good platform to reach a greater number of learners and resolve their queries,” Ghosh says.
While cheap data rates have led to a rise in consumption of content across genres in India, what helped the finance segment is also the great run that the Bombay Stock Exchange and the National Stock Exchange have had in 2020.
Nifty and Sensex in 2020
After the sharp plunge in March due to a knee-jerk reaction to the pandemic, the stock markets have soared to new highs on the back of foreign investors’ interest and hopes of a faster than expected economic recovery.
The fear of missing out on making a quick buck has pulled novice retail investors into the markets. “We are witnessing a very sharp rise in queries on stock markets and equities products. Since March, people have realised that they need to have exposure to equities as they tend to outperform other asset classes,” said Mukul Malik, who runs a Youtube channel called Asset Yogi, which has over 1.8 million subscribers.
This is not just a lucrative proposition for retail investors, even the influencers are minting money.
Tying up with YouTube
Besides getting 55% of the ad revenue from Youtube, these personal finance influencers are also tapping into allied sources of income. For example, Malik ties up with brands such as Zerodha and insurance aggregator PolicyBazaar to promote them in his videos. “Brands want relevant audiences and audiences want good brands. So we are the ones who connect these two,” Malik says.
Also, most of these influencers aren’t relying only on YouTube. Some of them have launched their own platforms, where they offer paid courses. For instance, FinnovationZ.com offers a plethora of courses on stock market investments, ranging from Rs400 ($5.47) to Rs1,100. These courses include short videos and tests on a particular topic related to finance and investing.
Similarly, Ranade also offers paid tutorials on mutual funds, stock markets, and financial management.
“I find it easier to take these courses on my mobile when I am travelling or even at home. These are more helpful than listening to a jargon-riddled commentary of an expert on a business channel,” said Bhutani.
As the stock market continues to roar, this is a beneficial transaction for all stakeholders. But influencers and investors also need to be wary of the moment when this frenzy around markets wanes off.