Stock Preferences Vary by Age

  • By Hong Jun-ki

    January 20, 2021 08:44

    Korea has seen explosive growth in people dabbling in stocks since last year, and a closer look shows that preferences vary according to age group.

    According to an analysis of 715,000 new clients by Samsung Securities last week, younger people favor aggressive trading styles that actually produce little yield, while only teenagers and the elderly favor safer bets.

    But a strong preference for blue-chip stocks like Samsung Electronics among all age groups complicates the pattern.

    Millennials born between 1981 and 1995 were the most aggressive, putting 23.1 percent of their money in domestic and foreign pharmaceutical companies linked to coronavirus test kits or vaccines and 16.7 percent in inverse exchange trade funds (ETF) that bet against the market.

    Gen Xers born between 1965 and 1980 had a higher proportion invested in Samsung Electronics with 21.7 percent or other blue-chip stocks with 16.3 percent, but were also aggressive in investing in coronavirus-linked stocks (20.7 percent) or inverse ETFs (13.5 percent). 

    In contrast, baby boomers born between 1950 and 1964 opted for safer investments, favoring Samsung Electronics (34.2 percent) or other blue chips (29 percent).

    Those born between 1996 and 2000, also preferred safe investments with 32.2 percent parked in Samsung Electronics, though inverse ETFs attracted 14 percent of their money.

    Samsung Electronics was the top investment among all age groups except those in their 20s during the first week of this month. People in their 20s favor leverage ETFs, which double the returns of the Korea Composite Stock Price Index, followed by Samsung Electronics.

    When it comes to foreign stocks, all age groups favored Tesla except investors over 80, who favored Apple shares.

    Last year, purchases of Samsung Electronics common and preferred shares totaled W15.7 trillion, accounting for a staggering 33 percent of total stock investments by individual investors (US$1=W1,104). In the first week of January alone, individual investors bought W8.6 trillion worth of stocks, and W5.4 trillion or 63 percent of it was invested in Samsung Electronics shares.

    Lee Kyung-min at Daishin Securities said, "Individual investors are focusing their investments in big companies that are expected to display solid earnings, which is better than parking it in thematic stocks, but such an excessive inclination for particular shares is worrying." 

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