[Trend] Stock, Beyond Investment

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Handling a property is not easy work. Every year, people face the bittersweet outcome of financial management to be rich and sustain their lives. About 10 years ago, stock investment was a hard-to-reach sector in economy market. Known for its high profit and high-risk character, many people hesitate to risk giving a try. Individuals rather manage assets by saving deposits in the bank or buying real estates. But the historical downturn caused by the pandemic brought the major boom of the stock investment. According to Korea Financial Investment Association, the number of people in their 20s to 30s who own stock accounts escalated by 50% in the first-quarter of 2020, meaning MZ generations* make up the majority of Korea’s stock market. 

MZ generation*: a combination of millennials and Generation Z, refers to those born between 1980 and the early 2000s (definition from Korean Herald)

This shifted paradigm derived new coinages as well. The beginners who just entered stock market are commonly called by ‘Julini’, a combined word of stock(jusik) and children(eolini) in Korean, literally meaning the stock investment newbie. Also, ‘Women Buffet’, a word inspired from the tycoon investor Warren Buffett, depicts a surge of female population of stock market. Within four years, not only males but especially a number of female shareholders surged by two-fold. Since last year, with the fad of stock investment, females who are interested in the economy ardently started to stake their capital. It is also speculated that more and more women are participating in economic activity, which in turn affects their noticeable populations in the stock market. Asset management used to be exclusively taken by men in the past, this is no longer the case. Now women and men of all ages are showing fervent interests on expanding their wealth. 

One ‘Woman Buffet’ of Sungshin shared her experience of stock investment: “The concept of stock grabbed my attention long time ago. But it’s been around two years since I actually get into buying and selling investments. I always vaguely imagined about starting stock investment someday. Then luckily, I won prize money by winning a contest and directly decided to use spare money to snap into the stock investment. To be a successful stakeholder, I check economy, politics and social news every day. Rather than searching and studying about the educational aspects of stock, I prefer to read the flow of the society which influences the stock market. Plus, doing further research on the current sectors I’m investing in and the sectors I’m interested might be beneficial for future investment. I would definitely suggest fellow students to try stock investment. It doesn’t require clerkly knowledge. What you have to do is stick to basic information. Then you will be able to generate a huge profit and feel the flow of finance and economy firsthand, also being an active and independent participant of economy at the same time.”

The eased regulation of the stock market can explain the prevalence of stock investing in the financial sector. The high rate of commission charge was an obstacle that hindered people from the influx into the stock market. However, with the fever of stock investment, many people started to look for funds providing lower commission rate. Consequently, all the firms started to lower their commission rates competitively, providing broad options, thus recruiting more and more shareholders. For instance, Samsung Fund has been opening an event on 22nd of every month for new members, decreasing commission rate from 0.25% to 0.09% to their clients. 

In the era of centenarians, assets and real estate became essential factors to sustain one’s life. However, prolonged life expectancy, shortened retirement age, limited employment vacancies and stagnant paychecks cannot satisfy the grassroots’ expectation. Using money sparingly and saving them in the bank doesn’t work anymore. Now they are looking for rapid fortune-making option; the stock investment.

FinTech, a combined word of Finance and Technology, provides a service for asset management and easy-access to financial markets. One prominent example can be ‘Toss’. ‘Toss’ bloomed their business by introducing public certification free-service. Not only banking services, they are now also providing stock account inauguration. They are ever-evolving, quickly chases and reflects Korea’s economic trends. Also, ‘Bank Salad’, this FinTech application analyzes user’s consumption pattern, and recommends financial services based on one’s financial data. Comprehensive access to properties makes people to absorb in the joy of managing their assets. The development of financial applications and its fusion with technology greatly influenced our economy life styles. 

Another newly emerged psychological phenomenon can explain the rise of stock investment. FoMO, an abbreviation of ‘Fear of Missing Out’, directly describes current social ambience. Prolonged pandemic situation led people to feel incompetent as there are no tangible outcomes they can make. Humans have the nature of comparing themselves with others. To feel valuable and prove themselves as better than others, majority are plunged into stock investment to qualify their competence by achieving success and make conspicuous results through numbers.

Further factors are viewed that parents’ cash and stock donation contributed to the rise of youngsters in the stock market. Plus, as those in their 20s were once experienced with Bit coin, it is interpreted that they are becoming more acquainted with investing in virtual money and stocks, openly accepting newly introduced concepts with no hesitation. 

With quick changes in economy, the corporation’s management tactics are adjusting as well. Targeting the minority shareholders, the enterprises are providing pre-electronic voting services, online general meetings of stockholders, opening brokerage pop-up stores in department stores which are stockholder-friendly business strategies.

It is still too blurry to judge whether overheated stock market would bring profit or poison. Now, individuals are empowered more than ever before. The redistribution of power in stock market is clearly showing an optimistic signal. The youth’s great interests in wealth management are deemed that it will deliver positive educational effects to the young generation. However, disaster is always triggered by greed. Some market watchers are concerned that novice investors must develop an eye for reading trends and news of the stock market and not to be swept by mere trends or psychological factors. Success occurs when opportunity and preparation meet. Rather than making a hasty decision, it is important to prepare oneself to be a discerning individual with one’s firm belief to sublate asset expansion as a means of ostentation.

By Chaiwon Kim Editor-in-Chief

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