In the past, people thought of stock trading and investments as something difficult to learn and were intimidated by taking it on. However, nowadays there is a growing stock investment culture, especially with people in their 20s. In fact, the number of individual stockholders in their 20s has increased by 110,000 from last year, representing a rise of 330 million stock market shares traded. There are two reasons for this phenomenon. First, COVID-19 driven economic slowdowns has seen the market value of large company stocks fall, offering up a life-changing opportunity for investors willing to buy in to otherwise cost prohibitive shares with the view that their prices will rebound once the economy stabilizes in a post pandemic world. Second, the consumption patterns of people in their 20s has changed. While ‘You Only Live Once (YOLO)’ was once a widespread trend with the younger generation, investment technology including stock and investments subscriptions are the current trends.
|▲ 20's stock investment has increased steeply. (Photo From Shinhaninvest)|
“I want to invest in my future, but I only have 5 million won. It is far from the amount I need to buy a house, so I am investing in stocks instead,” said one investor Park Yu-jeong. Today, it is hard for young people to save money to invest in the housing market. An increase in the number of small families has led to an increase in demand for housing. However, limited land in urban areas and the speed of construction makes it hard for supply to meet demand driving up the prices. The government is trying to deal with the problem, but it is not happening soon enough for investors with money to burn. “I found many traditional investments unsuitable for me,” Park said. Low-interest rates being offered up by banks discouraged young investors from storing away their money in low wielding savings accounts. This coupled with the development of technology has encouraged young investors like him to look towards unconventional investment methods. The spread of computers and smartphones allows people easy access to investments. People can get information in 5 minutes by completing a simple search on the internet, closing the information gap between experts and ordinary people. Anyone who wants to invest in a company can get access to information about it. According to a survey by a Korean economic newspaper, 14 percent of 5757 people surveyed replied that easy access to in depth information made them enter the stock market. “Investing is not a game. You need to understand a lot of information. If you know what you want to invest in and how you want to invest, you can earn a lot,” said Mr. Ko, who earns a 200% return on his investments. That same survey revealed that 12% of respondents shared data about stock investments with their acquaintances. “I entered the stock investment following my friends," Mr. Lee said.. He worried he would be left behind so he jumped on board too. However, he made some bad investments. "I lost almost 2 million Won," Mr. Lee said.
The Dankook Herald interviewed some investors in their 20s about why they started investing in the stock market and how they earn money. "I get the information from online newspapers such as the Wall Street Journal and Bloomberg. Accessing them is much easier than before. You just need a Visa or Master Card to subscribe to them," Mr. Kim said. He used to get information from books, however now he gets it from online media including newspapers and magazines. Miss Lim who is studying investment, said she also started by reading books. "It is not easy for a beginner to systematically know about everything you need to know, so I joined the stock trading community to share information. It is very helpful.” We asked her how much she has earned from her investments. “Not much. Just 1 million won so far. Most of the community information is not useful, but some of them help me earn money.” However, not every investor doing well. Another investor Park Yu-jeong, said “I was monitoring the stock market all day, but it was too stressful, so I stopped doing it.”
|▲ The reason for stock trading of people who are in their 20s to 30s. (Photo From The Korea Economic Daily)|
The differences between the ways of older and younger generations are significant. In the past, people obtained information from books and hard copies of magazines and newspapers, while today people in their twenties can obtain information from the Internet through online magazines, news websites and even YouTube. This ease of access has made investments in the stock market more comfortable for the average investor. The reason for the recent increase in younger adults investing in the stock market is this ease of access and the low cost of buy-in, but it does not end there. Companies have also concentrated on the 20 somethings market for investment. When KakaoGames launched their public offering, shares were swooped up by investors in their twenties. The pure margin of KakaoGames is 59 trillion won. It is the best margin ever. Market insiders credited the share price success to the younger investor entering the realm of the public offering. While the younger generations may have been alienated from the stock market in the past, they have become the driving force within the last year.
The twenty something investment wave in the stock market is happening alongside the worst job market and the economic crisis. A lot of people are worried about how this will affect their future. However, there is no way to restrain individual investors from taking high risks. Luckily, people in their twenties tend to invest in the safe price of large capital stocks, not risky small capital stocks. With the best advice of making prudent and sound investments in mind, new stockholders just starting off in the market must actively study so they can invest wisely and not simply follow a mob mentality to the poverty line.
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