Abstract
Abu Dhabi Stock Exchange should start focusing on young investors in this country who have been ignored for a long time. These young people have the capacity to invest in various sectors that can help boost the economy of this country. However, there is a need to get the right education about stock market investment in order to realize its potential. When they have this knowledge, the government should introduce incentives that will make it easy for them to trade in this market. This is the only way ADX can attract young investors.
Introduction
Young people are succeeding in the stock market in various countries around the world. In Abu Dhabi, the youth have the potential to achieve a similar success if they are educated on approaches they can take when planning to invest in this area. However, Thomas (2011) says that most youths have ignored the stock market because they lack the right information. They do not understand how they can generate attractive incomes from the stock market.
This plan seeks to find a way through which Abu Dhabi Securities Exchange can educate and attract young people to the stock market investment. The Abu Dhabi Securities Exchange should form a partnership with the Ministry of Education in order to find a way of introducing informative lessons about the stock exchange at early stages of learning. According to Becket (2012), the best way of reaching a large number of young people in an effective manner is through their class work.
The current syllabus that is used in the high school and even in the college does not focus on stock market investment. It is possible for one to graduate from college without knowing anything about stock market investment, especially if they take courses, which are not business related. Examinable investment lessons should be introduced in high schools and colleges to enlighten the youths about investing in stock market.
The management of Abu Dhabi Securities Exchange may consider starting mentorship programs, which target young people in this society in order to attract them to the stock market. It may be important to organize talk shows in schools and colleges to educate and attract young investors to the stock market.
ADX can engage successful entrepreneurs in such talk shows in order to mentor young investors into this market. The social media can be very helpful in reaching out to the youth who have just left colleges. Such episodes may be posted in YouTube so that they can follow them anywhere in the country. Facebook and Tweeter may also be very appropriate in educating the youth about investment in the stock market. These initiatives should be organized and executed by a unit within this firm, and the management should set some funds aside specifically for them.
The Abu Dhabi Securities Exchange should invite college students to forums where they can learn how to trade in the stock exchange. In these seminars, students will be able to learn the dynamics of trading in this market from a practical perspective. They will be able to see how people earn interests in their investments in real time. This will motivate young people to consider investing their money into stock market.
Benchmark with successful worldwide stock
In order to achieve the desired success in this programme, it will be necessary to use successful initiatives of other countries’ stock market as a benchmark. The management of Abu Dhabi Securities Exchange will need to analyze the initiatives used by these stock markets in order to attract young investors.
One such initiative was recently introduced in Japan. According to Becket (2012), the Japanese government introduced a tax incentive for youths who considered investing in Tokyo Stock Exchange. The government conducted a survey of the investments made by the young Japanese and realized that most of them were investing in very delicate industries. For instance, many of them found the food industry to be very lucrative, but they were unable to achieve success because of the level of competition and the huge investments needed (Field, 2014). This resulted in a massive closure of new start-ups soon after taking off.
This would have serious negative impacts on investors. For this reason, the government decided to come up with a programme in 2007 that was to help the youth consider investing in the stock market (Kelly, 2010).
The government considered stock market to be the best investment for the youths because of their limited experience in running businesses. It was also very good for those who were in school because it only needs a fraction of their time. The government offered the youth tax holidays once they invested in the stock market (Field, 2014).
Although this initiative has received criticism from some people, Kelly (2010) says that it had a massive impact on the youth’s investment strategies. Before this programme, most of the young people in this country believed that stock market was meant for the older generation. However, they started viewing the stock market from a different perspective.
They realized that it was one of the best investment opportunities. It may not have given immediate results as many people expected. However, Becket (2012) says that it created awareness among the youths, and the impact is currently being felt. This scholar notes that Japan is one of the countries in the world with high a number of youths actively investing in the stock market.
New York Stock Exchange has the best history when it comes to the investment by young people. According to Hart (2005), this may be partly because of the fact that the public is well informed about stock market investment. Students start learning about this stock market at a very tender age, and this help them understand its benefits.
The management of New York Stock Exchange has continuously engaged the public through various events and this has helped so much in awareness creation. Some of the television shows that are partially sponsored by this stock market have also helped in enlightening the youth about the benefits of investing in the stock market.
One such show is the Shark Tank. Young people who want to expand their businesses always dominate the show. The show demonstrates to the viewers that one does not need to start a new business to own a business. One of the easiest ways out is to invest in an already existing firm that has a great potential in the market. These shows always create a desire among the youth to find a way of investing their income in the existing firms instead of starting high-risk businesses.
How ADX Can Support Young People to Start Investment in Stock Market
Abu Dhabi Securities Exchange can start successful initiatives that can help in attracting young investors into the stock market. According to Kelly (2010), young people have always been ignored when it comes to investing into the stock market. However, a new trend is emerging, especially in the United States and Europe, where young individuals start from a scratch and struggle through to become successful millionaires because of their business minds.
Facebook as a brand has already overtaken some of the best-known brands in the market such as the General Motors, Emirates Airline, and even PepsiCo (Becket, 2012). Facebook is an initiative of young people who believed that they could make it through in business. This justifies the need for this stock market to reorganize its strategies so that it can attract this new market niche. However, it is a fact that most of the youths may need some form of support in order start investing in the stock market.
Abu Dhabi Securities Exchange should start by engaging the stockbrokers to lower the rates they charge on their clients. These young investors should find it easy to buy and sell their shares without being levied exorbitant charges that may lower their profits.
According to Kelly (2010), most of the first-time investors in the stock market are always interested in the short-term investments because they want to test the market. When the fees charged by stockbrokers are high, then these new investors may not benefit from their investments. Reducing this fee will help these young investors benefit from their investments in the stock market.
The management of Abu Dhabi Securities Exchange may also consider petitioning the government to eliminate or lower taxes on the young investors. At this young age, these investors may need any form of help to boost their morale in investing in the stock market. The reduced taxation will help in increasing their profits in the stock market.
Successful Investors Who Made It into the Stock Market at Young Age
According to Bogle (2013), one of the best ways of motivating the youth into acting upon a given issue is to inform them of people who took the same path and achieved success. It is very important to identify some of the people who made it through in the stock market at a young age. It will offer these young people in Abu Dhabi an assurance that will encourage them to invest in the stock market.
Rachel Fox is a 16-year old American investor who has been very successful in the New York Stock Exchange for over the last few years. According to Macke (2014), Fox was a successful actor who started earning her own income at a very tender age. She would keep all her earnings in the bank account as per the advice given by the mother. At a tender age of fourteen, she decided to venture into the stock market with her income. That was in 2012.
The main challenge that she had to face at this tender age was her inexperience and limited knowledge in the stock market. She was a professional actor and new very little about trading in the stock market. In fact, Macke (2014) says that the only knowledge she had about stock market was from the episodes in her plays when she developed interests in this sector.
She had to rely heavily on the stockbrokers and her parents in order to invest her income wisely. Her tight schedule was also another challenge she had to deal with. She was still a student, an actor, a singer, and a guitarist (Macke, 2014). She had to give attention to all these areas, the fact that limited her time to learn more about stock market investment.
However, she believed that this was the best form of investment because it needed little of her attention. Macke (2014) also notes that the very first investment that Fox made was a total mess. She bought the stock at $ 2, but the value kept own depreciating and currently it is trading at a penny. However, she never gave up.
She went on and invested in other stocks, especially in the high-end jewels. This proved very successful. Her investment in the stock market started doubling, and currently, her earnings from acting and music is only a small fraction of what she gets from the stock market. Her success in the stock market has seen her become a blogger who offers young investors tips they can use when going to the stock market.
Michael Blanch flower is an Australian real estate investor who started his stock investment at the age of 19 years in 2003 (Field, 2014). The scholar notes that Michael gained interests in the real estate at a tender age. However, he did not have the right skills to venture into this business directly. His capital was also barely enough to start the investment. His main challenge at this age was the expertise needed to start a firm in this demanding industry.
Many financial institutions also considered him too young to be given a loan. He, therefore, decided to invest the little money he had in the stock market. He was very lucky because the demand for housing in Australia at this time was on the rise. He earned attractive interests, which he ploughed back.
He would increase his shares in the market every time he earned income from his regular job. His success in Australia convinced him to try investing in New York Stock Exchange. The results he got were amazing. Field (2014) says that Michael is currently one of the most successful NYSE traders in the real estate sector.
How ADX Can Educate and Attract Rural People into Stock Market
For a long time, trading in the stock exchange has been regarded as a preserve for the rich urban dwellers. However, people living in the rural set-ups in this country also have the capacity to invest in Abu Dhabi Stock Exchange. ADX needs to find a strategy of educating and attracting them so that they may find a reason to invest in this market. One of the best ways of doing this is through advertisements. ADX can use television commercials to educate the public on how to invest in the stock market and the benefits that comes with it.
ADX can also convince stockbrokers to set up offices in the densely populated rural settings so that their services are brought close to the people. This way, the rural investors can find it easy to visit these offices, ask relevant questions, and start investing in the Abu Dhabi Stock Exchange without having to travel to the city.
References
Becket, M. (2012). How the stock market works: A beginner’s guide to investment. London: Kogan Page.
Bogle, J. C. (2013). The little book of common sense investing: The only way to guarantee your fair share of stock market returns. Hoboken: Wiley.
Field, T. (2014). NZX looks to attract young investors. Web.
Hart, C. M. (2005). I want to make money in the stock market: Learn to begin investing without losing your life savings. Denver: Outskirts Press.
Kelly, J. (2010). The neatest little guide to stock market investing. New York: Plume Book.
Macke, J. (2014). 16-Year-Old Actress Turns into Stock Day Trader. Web.
Thomas, R. G. (2011). Free capital: How 12 private investors made millions in the stock market. Hampshire: Harriman House.