[Exclusive] Half of 'Debt Investment' Cases Are People Aged 50 and Over... Silver Ants Bet Retirement Funds in Market Crash

Outstanding Margin Loans at Top 10 Securities Firms: Over Half Held by Investors Aged 50+
Stock Margin Loans Reach 15 Trillion Amid Soaring Interest Rates in Plummeting Market
Margin Loan Balance for 50+ Investors Exceeds 54.5%, Surpassing Half

On the 11th, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI index started at 2193.02, down 39.82 points (1.78%) from the previous trading day. The won-dollar exchange rate opened at 1428.0, up 15.6 won. Photo by Moon Honam munonam@

(Source: Office of Yoon Young-duk, Democratic Party of Korea, Financial Supervisory Service)

[Asia Economy Reporters Ji Yeon-jin and Gu Chae-eun] More than half of investors who bought stocks on margin in the first half of this year were ‘silver ants’ aged 50 and above, nearing retirement. While younger investors, who rapidly increased margin trading during the liquidity boom triggered by COVID-19, experienced the bitter taste of forced liquidation and significantly reduced their margin trading, those aged 50 and above are still betting on a rebound market.

According to data submitted by the Financial Supervisory Service to Yoon Young-duk, a member of the National Assembly’s Political Affairs Committee from the Democratic Party of Korea, as of the first half of the year, the top 10 securities firms by assets lent approximately KRW 15.1655 trillion to investors. The margin loan balance for those in their 50s and 60s was the highest at KRW 5.0233 trillion (33.1%), and those aged 60 and above accounted for KRW 3.2464 trillion (21.4%). The margin loan balance for those aged 50 and above exceeded half at 54.5%.

The margin loan balance represents the amount investors borrowed from securities firms to purchase stocks, indicating that the generation nearing retirement is making more aggressive investments during this year’s declining market.

In particular, investors aged 60 and above significantly increased their margin loan balances during the rising market following the COVID-19 crash, and further expanded their margin trading during the sideways market last year. As of the end of last year, the margin loan balance for those aged 60 and above was KRW 3.79 trillion, a 31.96% increase compared to the end of 2020. This was the highest growth rate among all age groups. Those in their 50s followed with a 20.95% increase in margin loan balance at the end of last year.

On the other hand, younger investors rapidly increased their margin trading during the COVID-19 crash but adjusted during the sideways market last year and significantly reduced their margin loan balances in the first half of this year. The margin loan balance for investors under 30 was only KRW 160 billion at the end of 2019 but surged 200% to KRW 480 billion by the end of 2020. The balance, which was KRW 500 billion at the end of last year, decreased by 32% to KRW 320 billion in the first half of this year. During this period, investors in their 30s and 40s expanded their margin loan balances from KRW 4.36 trillion to KRW 7.56 trillion, reaching KRW 8.89 trillion at the end of last year, but dropped to KRW 6.56 trillion this year.

The margin loan balances of investors under 50 in the first half of this year were lower than at the end of 2020. It is interpreted that individual investors who traded on margin during the post-COVID-19 rising market suffered losses or were subject to forced liquidation, leading to a reduction in margin trading. According to the Korea Financial Investment Association, forced liquidation amounts, which slightly exceeded KRW 2 trillion in 2019, surged to KRW 3.9216 trillion in 2020 and KRW 4.8986 trillion last year. This year, forced liquidation amounts reached KRW 3.0346 trillion as of September 30.

However, margin loan balances for those in their 50s decreased by only 18.15% this year, and those aged 60 and above decreased by 14.41%. As a result, the proportion of margin loan balances for those aged 50 and above increased from 49% in 2020 to 50% last year and further grew this year. Considering the forced liquidations that occurred during this year’s sharp market declines caused by U.S. interest rate hikes and the Russia-Ukraine war, concerns have been raised that the retirement life of those aged 50 and above nearing retirement could be at risk.

Assemblyman Yoon Young-duk emphasized, “Even if it is the same margin trading, the impact on the elderly aged 60 and above is greater than on young people in their 20s,” and added, “It is necessary to exercise caution when elderly investors use margin loans for stock investment.”

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