Although Minor Stock Accounts Have Increased... "Still Feeling Hesitant"

John Lee, CEO of Meritz Asset Management, "Cannot Escape Financial Illiteracy with Past Perceptions"

On the 21st, as the KOSPI index surpassed 3,000, sparking a stock investment craze, citizens visiting Kyobo Bookstore in Jongno-gu, Seoul, are seen looking at books related to stock investment and financial management. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Gong Byung-sun] As the stock investment craze spreads, the number of minors interested in stocks is increasing. However, there are concerns that the persistent negative perception and inadequate education regarding stock investment need to be addressed.

As minors' interest in stocks grows, the number of accounts actually investing has also increased. According to Kiwoom Securities, from January last year to January this year, the number of new stock accounts opened by minors was 153,643. This is more than double the 61,038 stock accounts created in the entire year of 2019. In particular, 38,020 accounts were opened in January of this year alone.

Minors start investing in stocks partly due to adults, but many have voluntarily developed interest as a way to prepare for the future. Do-hyun Choi (18), a high school student in Busan, said, “I heard that there will be many expenses after entering university,” and added, “I started stocks because I wanted to earn money myself rather than relying on my parents.” There were also students who challenged themselves for their dreams. Hyun-woong Jo (18), a high school student in Gangnam-gu, Seoul, explained, “I was impressed by the biography of Warren Buffett I read in the first year of middle school,” and said, “I also developed a dream to become the Warren Buffett of Korea.”

Minor investors who invest in stocks for the future studied on their own and achieved decent returns. Jo achieved a 110% return after studying for two years and starting stocks in 2019. Choi also recorded a net profit of 29 million KRW over three years through stocks. Choi said, “Basic studies such as principles of economics and how to read financial statements were more helpful for stock investment than reading charts.”

Although the number of minor stock investors is increasing, negative perceptions toward students investing in stocks remain. It is not easy to change the view that sees it as a delinquency like gambling or that students who should be studying investing in stocks is undesirable. In Choi’s case, it took half a year to persuade his parents who equated stocks with gambling. Even after getting permission, he still felt self-conscious. A parent of a middle school child expressed concern, saying, “If students who have not yet properly established their perception of money invest in stocks, making large profits or suffering large losses at a young age will inevitably have negative effects on the child.” A private investor with over 20 years of experience said, “It is not bad for minors to have interest and study economics or stocks from an early age, but since minors may find it difficult to take responsibility for large losses, I do not recommend stock investment for minors.”

The lack of related education is also a problem. There is no proper education to help students engage in correct investment activities. There is an opinion that fundamental changes in perception about stocks and proper education are necessary. John Lee, CEO of Meritz Asset Management, pointed out, “Korea is a financial illiteracy country,” and said, “With the outdated perception of stocks held by adults in the past, we cannot escape financial illiteracy.” He added, “There is an absolute lack of infrastructure to provide stock-related education in educational settings,” and emphasized, “True financial education will be achieved only when we fundamentally move away from rote learning.”

This content was produced with the assistance of AI translation services.