Why we should not worry too much about day trading and gamification

Back in January, I wrote a couple of blog posts in which I welcomed the emergence of a new generation comfortable with equity investment and credited this group with driving the shift that has taken place from foreign to domestic sources of risk capital in India. I have received a lot of push back against this proposition from people who feel that this new generation is filled not with investors but with day traders. My critics argue that young day traders are gambling their money on short dated options and losing most of it. Would these youngsters not have been better off sticking to bank deposits like their parents? Can people who treat their gamified stock trading apps like video games be called investors in any meaningful sense?

I do accept that there is a lot of truth in these counter arguments, but I do not share the alarm and hand wringing that accompanies these claims. Gamification does not worry me because as Charles Eames said, "toys and games are the preludes to serious ideas". The two biggest problems in personal finance are (a) that people save too little, and (b) that they invest too little of their meagre savings in equity markets. If games encourage the youth to save, and to participate in equity markets, then that is to be welcomed. Yes, many of these young investors will lose money, and some of them will lose almost all their savings. But they have the huge advantage of being able to rebuild those lost savings, because they are so early in their career. Their losses should be regarded as the tuition fees that they are paying to develop a disciplined investing style later in life. And the boom in mutual fund Systematic Investment Plans (SIPs) is evidence that this generation is also learning disciplined investing.

I am much more mortified when I encounter senior citizens putting their retirement savings into some scam or the other and losing a big chunk of their wealth. Their losses are irreversible because at that stage in the life cycle, they have no opportunity to rebuild their nest egg. When we probe why the elderly are so vulnerable to such scams, the answer is often that throughout their career, they invested in safe assets that yielded too little, and late in life they have realized that their accumulated saving is not sufficient to sustain a reasonable standard of living in retirement. The elderly are gambling for redemption now, because they gambled too little early in life. They are in a much worse position than the youngsters enjoying their gamified trading app on a smartphone.

Posted at 4:11 pm IST on Mon, 30 Mar 2026         permanent link

Categories: behavioural finance, equity markets, Indian financial sector, investment, risk management

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