Typically, the primary investors in the stock market are those in their 40s and 50s, as they are the most financially stable generation and have more disposable income for stock investments. According to last year's statistics from the Korea Securities Depository, nearly 45% of all stock investors are in their 40s and 50s.
However, the highest investment returns in the domestic stock market during the first half of this year, when the KOSPI was on the rise, came from investors aged 60 and older. Analysts suggest that the lower use of margin trading and a stronger tendency for long-term holding among older investors contributed to their superior performance in a bullish market.
On September 30, Kim Jae-seop, a lawmaker from the People Power Party, analyzed data submitted by eight major securities firms (Korea Investment, Mirae Asset, NH Investment, Samsung, KB, Kiwoom, Shinhan Investment, and Toss Securities) regarding the status of individual investors in domestic and foreign stock investments. The analysis revealed that individual investors earned 231.1398 trillion won in domestic stock profits from January to June this year, nearly double last year's annual profit of 115.1326 trillion won. After incurring losses of 33.9736 trillion won in 2024, individual investors returned to profitability last year and saw significant gains this year. The total trading volume of individual transactions in domestic stocks at the eight securities firms reached 8,902.8035 trillion won, a 43.2% increase from last year's annual total of 6,214.9872 trillion won.
Trading Volume from 40s and 50s, Returns from 60 and Older
How did investment profits vary by age group? In absolute terms, the largest profits came from investors in their 50s, who earned 69.951 trillion won in domestic stock investments during the first half of this year. This was followed by those in their 60s with 58.2437 trillion won, 40s with 42.540 trillion won, 70s with 25.9721 trillion won, 30s with 18.5827 trillion won, those over 80 with 8.1378 trillion won, and those in their 20s with 5.215 trillion won.
However, when comparing the proportion of total trading volume to the share of total investment profits, the performance of investors aged 60 and older stands out. While investors in their 50s accounted for 32.6% of total trading volume, their profit share was only 29.9%. Investors in their 40s made up 21.5% of trading volume but only 18.2% of profits, and those in their 30s represented 13.1% of trading volume and 8.0% of profits.
In contrast, investors in their 60s accounted for 22.4% of total trading volume but 25.2% of total investment profits. Investors in their 70s made up 5.9% of trading volume but 11.2% of profits, while those over 80 represented 1.1% of trading volume and 3.5% of profits.
The combined trading volume of all investors aged 60 and older was 29.3% of the total (2,611.735 trillion won), significantly lower than that of the 40s and 50s, yet they achieved investment profits of 92.3536 trillion won, accounting for 40.0% of total profits.
How Older Investors Withstood Market Declines
What accounts for the relatively high returns among investors aged 60 and older? It is likely due to their different investment strategies compared to those in their 40s and 50s.
In March of this year, the domestic stock market experienced a sharp decline due to escalating conflicts in the Middle East. On March 23, the KOSPI closed down 6.49% at 5,405.75, triggering a sell-off. However, the market rebounded, and by the latter half of the year, it was on track to reach record highs. During this period, investors who used margin trading faced risks of forced selling during the market downturn, making it difficult to hold onto their investments. In contrast, investors with a higher proportion of their own funds were able to endure the downturn and maintain their holdings through the subsequent recovery.
Financial industry experts believe that the March downturn differentiated investment performance by age group. Those who invested using credit faced forced liquidation during the downturn, while those who invested with surplus funds were more likely to hold onto their investments through short-term shocks and benefit from the subsequent rebound.
A private banker at a securities firm noted, "Clients in their 60s and 70s often have larger amounts of investable funds and tend to invest with their own capital rather than on credit. They are more inclined to hold onto their investments for the long term rather than making quick trades based on short-term returns, which gives them resilience during significant market fluctuations."
Lee Chan-jin, the head of the Financial Supervisory Service, echoed this analysis during a press briefing on March 26, stating, "Individuals in their 20s and 30s have seen little profit due to high levels of debt, making it difficult to hold onto investments. In volatile markets, a sharp decline in stock prices can trigger forced selling, leading to significant losses. In contrast, those in their 60s and 70s remained largely unaffected during the March downturn."
The KOSPI rebounded after the March decline, reaching record highs, closing at 9,114.55 on June 22, marking the highest closing price ever. Investors who were able to hold onto their stocks during the downturn were able to reap the benefits of the subsequent bull market.
Proportion of Trading by Investors Aged 60 and Older Increased from 24% to 29% in Two Years
The participation of older investors in domestic stocks is also rapidly increasing. The share of total domestic stock trading volume accounted for by investors aged 60 and older rose from 15.8% in 2021 to 19.1% in 2022, 21.9% in 2023, 24.4% in 2024, 28.5% last year, and 29.3% in the first half of this year.
Notably, the proportion of investors in their 60s increased from 12.8% in 2021 to 22.4% in the first half of this year, while the share of those aged 70 and older more than doubled from 3.0% to 6.9% during the same period.
Conversely, the proportion of investors in their 40s decreased from 31.0% in 2021 to 21.5% in the first half of this year. In 2021, the trading volume of investors in their 40s was more than 18 percentage points higher than that of those in their 60s, but by the first half of this year, the 60s (22.4%) had surpassed the 40s (21.5%).
The absolute trading volume has also significantly increased. The trading volume of domestic stocks for investors aged 60 and older rose from 1,144.1962 trillion won in 2024 and 1,769.7404 trillion won last year to 2,611.7350 trillion won in the first half of this year, which is 47.6% more than last year's annual trading volume in just six months.
* This article has been translated by AI.
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