At the end of last year, there were 14.42 million domestic stock investors in South Korea, an increase of over 300,000 from the previous year. This surge was fueled by a rising stock market in the latter half of the year, attracting many young investors in their 20s and 30s. This trend continued into the first half of this year.
However, since late June, the domestic stock market has experienced a rollercoaster ride, leading to a rapid decline in investor sentiment. Industry analysts note that while this decline in sentiment is evident across all age groups, young investors in their 20s and 30s are increasingly turning to alternative investment options such as the U.S. stock market and cryptocurrencies.
On August 31, an analysis by Aju Economy of trading data from Samsung, Hana, and Hyundai Motor Securities revealed a clear trend of stock market exit among young investors. Trading volume for those in their 20s and 30s dropped from 114.1479 trillion won in June to 41.7027 trillion won in August. During the same period, the number of trading customers fell sharply from 684,144 to 501,361.
The influx of new young investors is also declining rapidly. Separate data on new customer statistics shows that the number of monthly new customers in their 20s and 30s fell from 32,802 in June to 19,298 in July and 17,830 in August, marking a 45.6% decrease over two months. This indicates a slowdown in both existing investors' trading activity and new customer acquisition.
The decline in trading is not limited to young investors. Data on trading by age group shows that stock trading volume for those outside the 20s and 30s demographic also decreased, from 11.4139 trillion won in June to 7.3266 trillion won in July and 4.0884 trillion won in August. The number of trading customers in these age groups also fell from 59,393 to 46,200 and then to 32,217.
The overall composition of investors by age indicates a rising proportion of investors aged 60 and older. According to one source, the share of customers under 20 decreased from 8.43% at the end of June to 8.30% by August 26, while the share of those in their 30s dropped from 14.49% to 14.40%. In contrast, the proportion of investors in their 60s increased from 32.34% to 32.66%.
Other data also shows a decline in the share of customers in their 30s from 19.19% at the end of June to 19.14% by August 26, and a slight decrease for those in their 40s and 50s. Meanwhile, the share of investors aged 60 and older rose from 22.03% to 22.15%. The proportion of customers under 20 increased slightly from 13.25% to 13.27%.
As overall investor sentiment weakens, young investors appear to be leaving the domestic stock market in search of alternative investment opportunities in the U.S. stock market and cryptocurrencies. Choi Hyeon-jae, head of the research center at Yuanta Securities, stated, "In fact, those in their 20s and 30s have been actively trading stocks in the U.S. market. It may not mean they are leaving the stock market entirely, but rather that they find the Korean market uninteresting and are exploring other options." He added, "Recently, the cryptocurrency market has shown some improvement, which likely attracts many investors there as well."
The tightening of investment thresholds for high-risk products, such as single-stock leverage, is also cited as a reason for the exodus of young investors. Baek Young-chan, head of the research center at SangSangIn Securities, noted, "As the domestic index continues to decline and face corrections, some investors may have cut their losses and moved to the U.S. or other foreign markets. Those who do not meet the qualification requirements are likely unable to participate, as very few can meet the deposit criteria. This is also presumed to be a factor in their exit."
Market analysts caution against viewing the recent decline in trading solely as a 'great escape' by young investors. They emphasize that the overall decline in investor sentiment due to increased market volatility should also be considered. A securities industry official remarked, "As market volatility has increased, investors' risk appetite has generally weakened. This is not just a phenomenon limited to a specific generation but rather a broader change in investor sentiment in response to recent market conditions."
* This article has been translated by AI.
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