"Short Selling? Blockchain? 2030 Jumping into Speculation Without Analysis"

[2030 Betting on Stocks for the Future]
Investing for Short-Term Gains Leads to Losses... "If Not Now, There's No Chance to Make Money"
Excessive Investment Focus Negatively Affects Daily Life

[Asia Economy Reporter Gong Byung-sun] As the number of people in their 20s and 30s investing in stocks and other assets increases, concerns are growing as cases of losses caused by investing in ‘speculative assets’ such as GameStop stocks or cryptocurrencies?where rapid capital gains can be made without any information?are also rising.

Recently, amid the sharp rise in GameStop’s stock price in opposition to short-selling forces, some investors in their 20s and 30s jumped in like moths to a flame, aiming only for short-term profits, and ended up suffering losses. On the 27th of last month (local time), individual investors rallied on social networking services (SNS) against short-selling by hedge funds such as Melvin Capital, causing GameStop’s stock price to surge by 134.84%.

Office worker Kim Kyung-min (31, pseudonym) suffered significant losses after investing in AMC Entertainment (AMC), which surged 300% due to the short-selling war. The initial short-term trade (quick investment and profit realization) that earned him a 4 million KRW profit was the turning point. Kim said, “Because of the success in short-term trading, I kept chasing only rapidly rising stocks, but ultimately lost more than 4 million KRW.” Kim was not originally a short-term trader. He had been buying stocks as a long-term investment by setting aside part of his salary. However, seeing GameStop’s stock price soar, he felt it was an opportunity. Kim explained, “I was never interested in the cause of opposing short-selling forces; I invested in AMC because I thought there was no other chance to make money now.”

The same goes for cryptocurrencies. Recently, as companies like Tesla focused on the value of cryptocurrencies and their prices surged, more investors without understanding the related market have been rushing in blindly. Some have suffered losses after hastily investing in cryptocurrencies just by hearing stories from acquaintances who made big money.

Lee Ji-hyun (27, pseudonym) started investing after hearing from her nephew who made billions in profits from cryptocurrencies. She invested 2 million KRW by cashing out her savings but only incurred losses. Lee said, “I bought rapidly rising cryptocurrencies and lost about 10% in an instant. I don’t know much about blockchain, but I’m investing with the belief that the price will rise if I wait.”

There are also many cases where excessive enthusiasm for stock investment affects daily life. Due to the characteristics of the U.S. stock market, which operates from 11:30 PM to 6 AM Korean time, and the cryptocurrency market, which trades 24 hours a day, sleeping hours inevitably decrease. Oh Yeon-ji (23, pseudonym), a job seeker who invested in GameStop, has been losing sleep every dawn checking U.S. stock prices and is unable to prepare properly for employment. Oh said, “My sleep pattern has changed because of stocks, and it has disrupted my job preparation.” Lee Young-ho (32, pseudonym), who recently succeeded in getting a job, said, “I have been investing in stocks since before employment and have continued even after starting work, but I have been scolded by my boss more than once for looking at stock charts during working hours. I try to control myself, but I get anxious about missing buying opportunities, so it’s not easy to regulate.”

Kim Young-ik, adjunct professor at Sogang University Graduate School of Economics, diagnosed the current situation by saying, “The 20s and 30s who started investing now have only witnessed a bull market, so they more easily engage in speculative assets,” and explained, “The economy has cycles, and bubbles will eventually burst.” He added, “People in their 20s and 30s should also study economic cycles and invest for the long term.”