[Gen Z Stock Frenzy] Sharing Stock Info in Group Chats, Studying the Stock Market via YouTube

Experts Say "Studying Finance and Investment Is Positive"
"Opaque Investments and Debt-Financed Trading Are Concerning"
High Turnover Rate of Stock Accounts Among 20s
Clear Trend of Short-Term Investment Using Borrowed Funds

[Asia Economy Reporters Donghoon Jeong and Seungyoon Song] Stock investment among people in their 20s relies heavily on humint (human intelligence obtained through personal networks) and YouTube. In the rapidly changing stock market, they have jumped in armed with mobile chat applications and YouTube. Sim Mo (29), an office worker employed at a small-to-medium enterprise in the Seoul metropolitan area, invests in stocks based on information obtained from acquaintances after getting a job. In the KakaoTalk group chat created by Sim’s acquaintances, office workers from various professions gather to share investment methods.

Since March, Sim has invested in blue-chip companies like Samsung Electronics and Kakao, earning over 30% returns, but he calls his investment style relying on humint "blind investment." Sim said, "I believe that liquidity has expanded due to COVID-19, so money will flow into the stock market," adding, "I want to make profits enough to help with buying a house or a car."

Job seeker Choi Mo (27) studies the stock market through YouTube. Choi said, "I am learning stock terms and how to read stock charts through YouTube and books, which I didn’t know before," and added, "In this era of low interest rates and low growth, it is difficult to increase assets, so I invest in stocks with the desire to manage them efficiently."

Experts view the investment boom among people in their 20s positively in terms of "financial and investment study," but express serious concerns about "blind investment" and "debt investment." Professor Sung Tae-yoon of Yonsei University’s Department of Economics said, "People need to develop the ability to discern information obtained through YouTube or SNS (social networking services) as their own knowledge."

Youth who tend to invest mainly based on recommendations or rumors from acquaintances are unfamiliar with the so-called "operations" that occur and circulate in the market. Compared to older generations with relatively more experience, they are at higher risk of being exploited by manipulation groups. In fact, the return rate for people in their 20s is the lowest among all age groups. According to KB Securities, among newly opened accounts this year, the return rate for people in their 20s was 13.5%, lower than that of teenagers and younger (14.6%) or those aged 60 and above (14.5%).

This seems closely related to the investment style of people in their 20s. The turnover rate of "credit loan stock accounts," which involve investing with borrowed funds, was overwhelmingly higher for people in their 20s at 5513%, compared to 4382% for those in their 30s and 3870% for those in their 40s. This shows a clear tendency among them to use borrowed investment funds for "short-term investment."