Shifting Investment Pattern of Middle Class

Covid-19 has impacted millions of individuals around the world and taken thousands of lives, causing families to be torn apart and the world to be wounded. Apart from the effects on people’s physical health, it has also impacted the economy, which is where it hurts the most. It has impacted practically every socioeconomic group, leaving thousands of people jobless and without a consistent source of income. Uncertainty and risk had a substantial economic impact on both established and rising economies such as the United States, Spain, Italy, Brazil, and India.

The unprecedented COVID19 epidemic had put the world in peril and shifted the global landscape in unanticipated ways. Many countries’ economic operations were suddenly halted as tight quarantine rules are implemented to combat an unknown disease. Social isolation, self-isolation, the closure of institutions and businesses, the restriction of modes of transportation, and national lockdowns were among the measures used to combat the epidemic. Despite the fact that such measures were appropriate given the fact that this was a unique virus with no known cure, the impact on global economic activity was enormous. Companies’ productivity was negatively affected by social distancing measures, which resulted in a loss in revenue, greater operating costs, and cash flow problems. This unanticipated epidemic has had a negative impact on the financial markets of most developed and developing countries. The financial market tanked and later bounced back based on fiscal stimulus.

Behavioural biases become more prevalent during market crises, according to the study. Investor preferences change over time. They are influenced by investor behaviour as well as a variety of other factors.  Investor preferences changed in both pre- and post-COVID-19 scenarios. Generally, investors favour asset classes that provide consistent and predictable returns while posing the least amount of risk. Finally, investment is a logical decision that is based on an individual’s risk appetite and return expectations, which are based on a subjective assessment of a variety of circumstances. Most investors seek to make investments that will yield large returns in a short period of time while minimising the danger of losing money. This is why many people are always on the search for high-yielding investment opportunities that will allow them to double their money in a short period of time with little or no risk. In truth, risk and return are inextricably linked, i.e., the bigger the risk, the larger the reward, and vice versa. When choosing an investing strategy, it’s important to match one’s risk profile to the product’s risks.

Education, income level, values, customs and beliefs and accessibility to financial services determine the investor’s behaviour. The slowing economy and the closure of a number of enterprises has prompted us all to reconsider the importance of saving and investing in our daily lives. Many families and individuals have had to dip into their little reserves to get through the Covid 19 storm, highlighting the importance of prudent saving and investment once again. The post-COVID scenario for individual investment patterns is thought to reflect a shift in their investment outlets. This shift in portfolio will be primarily due to fluctuations in income levels during the pandemic. Job losses, wage reductions, and low/no business are just a few of the causes that have impacted retail investors purchasing power. Regardless of income levels, many people may participate in mutual funds, and equity markets during the epidemic. This shows that these investors took advantage of market volatility, as it is usually a good time to invest when the market is down. Job baggers are millennia’s who value purpose-driven work. Saving has never been a priority for them, but with this pandemic, it is likely that they will prioritise saving and stability.

Investor preferences change over time. Investor behaviour and a variety of external circumstances influence them. Covid – 19 was a once-in-a-lifetime event that shifted the global worldview and established a “new normal” and changed the investors’ preference for investment options in pre and post pandemic world. Generally, investors favour asset classes that provide consistent and stable returns while posing the least amount of risk. Finally, investment is a rational decision that is based on an individual’s risk appetite and expected return based on a subjective appraisal of multiple factors.

Covid 19 has had a significant impact on the world, producing unparalleled health and economic problems. Almost everyone got a pay cut; many people lost their jobs and businesses faced irrevocable losses. The pandemic has once again emphasised the necessity of saving and how it is a tradition in India that has shielded India from the harsh repercussions of global economic upheaval on several occasions. Not just the elderly and middle-aged, but also young adults and millennials have recognised the necessity of saving and are attempting to instil the practise among them. The situation seems bleak, and the rainbow at the end of this storm will not appear for some time, yet there is reason to be optimistic. No pandemic in the world will be able to stop us from progressing as long as we work together, save, and go forward.

Stock Market has seen unprecedented participation from retail investors post pandemic. Millions of new accounts D-Mat accounts were opened. Indian markets gained strengthened from retail participation and market continued to touch new heights even when foreign funds from market was flowing out. With the falling interest rate and rising inflation, people will lose their saving. Money will ultimately flow towards the products which guarantee better returns whilst managing the risk equilibrium.


Author: Manya Srivastava

Manya is passionate about economics, data research & analysis . She can be reached at

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