Losses for "debt-investing" Les Fourmis have grown to more than three times those of retail investors who did not use margin loans. The gap in returns between debt-investing Les Fourmis and investors who did not use margin loans was especially pronounced among people in their 20s and 30s.
According to the financial investment industry on the 22nd, the average account return for debt-investing individual investors who used margin loans from the start of this month through the 9th was minus (-) 19%. Based on an analysis of about 4.6 million comprehensive individual investor accounts, it was twice as bad as the return (-8.2%) for individual investors who did not use margin loans.
The loss gap between debt-investing individual investors and investors who did not use margin loans was particularly notable among younger people. For those in their 30s, the return for retail investors was -6.6%, better than those in their 50s (-9.9%) and 40s (-7.9%), but when using margin loans, the return fell to -18.2%, deteriorating by about 2.8 times.
Among investors in their 20s, those who used margin loans also saw losses widen about 2.7 times, with a return of -17.8% compared with -6.7% for accounts without margin loans. Returns for debt-investing accounts were worst among those in their 60s, but the gap was relatively small because the return for non–margin loan users in their 60s was -9.2%.
The smaller the investment amount, the larger the loss-rate gap between debt-investing and retail investors. For accounts using margin loans with less than 10 million won invested, the return was -20.7%, 2.8 times worse than nonusers (-7.5%). In particular, among small investors in their 20s, the loss rate grew 3.2 times when using margin loans.
This is analyzed to be because investors in their 20s tend to choose a so-called "all-in" strategy, using margin loans to concentrate heavily in certain stocks. Even in the 2022 bull market, a similar pattern was observed in which newer, younger, and small-amount investors had lower margin-trading returns and weaker diversification.
A person in the securities industry said, "So-called leveraged investing using margin loans can significantly amplify losses when stock prices fall," and added, "Margin loans should be used cautiously and only within a tolerable range."