[Gen Z Stock Frenzy] Youth Filling 'Uncertain Tomorrow' with Stocks

Layered Ladder Missing·Employment Crisis Overlap
20s Jump into the COVID Stock Market

20s Hold the Largest Share of Newly Opened Accounts This Year
Clear Increase in Credit Lending Balance Too

[Asia Economy Reporters Lee Gwan-ju and Lee Jung-yoon] Yoon Sang-hoon (28, pseudonym) has a total asset of 10 million won in bank deposits. In May, he invested all of this money in 'new coronavirus (COVID-19) theme stocks.' Currently, his return rate is -20%. His precious 10 million won is now 8 million won. However, he is not discouraged. "It will go up someday." He plans to continue investing. "Anyway, I can't buy a house by saving my salary. Without a house, it's hard to even think about marriage. The COVID-19 market might be my last chance in life."

The fact that young people in their 20s and 30s, who find it difficult to expect wealth inheritance, have jumped into the stock market is the result of various social and economic factors combined. Employment difficulties, unfairness of the 'gold spoon' class, skyrocketing real estate prices... After missing the opportunity during the 'cryptocurrency boom,' these young hands that once lamented are now clutching stocks, dreaming of a 'life turnaround.' Those who entered the market about six months ago, at the early stage of the COVID-19 crisis, made some profits. However, many who joined later suffered significant losses. It is not hard to find stories of failure among 20-something stock market beginners who even borrowed money to invest. This is due to following acquaintances who said "I made some money" and the social atmosphere that "there is no 20-something who doesn't invest in stocks."

According to the securities industry on the 28th, among all age groups, the proportion of newly opened stock accounts this year is highest among people in their 20s. In the case of KB Securities, the age distribution of newly opened stock accounts from January to August this year showed that 31% were in their 20s, followed by 30s and 40s at 24% and 21%, respectively. Other securities firms show slightly different numbers but a similar trend. The increase in 'credit loan balances,' which refers to borrowing money using stocks as collateral or through margin loans, was also prominent among people in their 20s. According to the Financial Supervisory Service, the credit loan balance of people in their 20s at six domestic securities firms increased by 132.2%, from 311.9 billion won in 2017 to 724.3 billion won at the end of June this year. This increase is much larger than that of people in their 30s (39.4%), 40s (22.4%), and 50s (15.1%) during the same period.

Many investors in their 20s have experienced bitter lessons in this process. A typical case is 'blind investment' based on 'hearsay communication.' So-called 'stock traders' pick stocks they have purchased through YouTube lectures, prompting beginners to buy more, which sometimes drives up the stock price. According to KB Securities, the return rate of people in their 20s this year was 13.5%, the lowest among all age groups including teenagers (14.6%). Professor Kim Sang-bong of Hansung University’s Department of Economics said, "It is positive that people in their 20s take an interest in the economy and invest in stocks as it helps economic study," but added, "They should not be misled by YouTube information and should invest using assets they can afford to lose immediately."