As the stock market posts record gains, a "FOMO (fear of missing out)" mindset is spreading quickly on college campuses. Beyond chipping in allowance money, more people in their 20s are rushing into "debt-fueled investing," betting on stocks with student loans and overdraft lines of credit.
A college student surnamed Kim (25), who lives in Dongdaemun District, Seoul, put part of a student loan received for living expenses into a stock account earlier this year. At first, Kim bought just two or three shares of blue chips like Samsung Electronics, but after hearing stories of people around them making hundreds of thousands of won in a day, Kim's investing became increasingly bold.
Kim then threw about 22 million won into stocks, including money earned from part-time jobs and even an "emergency loan (overdraft)" from an online bank. In particular, as a volatile market continued with the index surging or plunging more than 5% in a day, Kim also made two-way bets on high-risk products such as leveraged and "double inverse" (inverse 2X) exchange-traded funds (ETFs) that track twice the index's moves.
On Mar. during the Middle East risk episode, there was a temporary profit, but amid a roaring market where the KOSPI broke through 7,000 and then 8,000 points in succession, a wrong call on direction left a current loss of about 6 million won. Kim now shows addictive behavior, unable to take their eyes off the mobile trading system (MTS) screen even during major classes.
Kim said, "At first, I thought I would build seed money before graduation," adding, "As the losses grow, my worries get bigger, but when everyone else is making money in stocks, I feel like I'm falling behind if I'm the only one not doing it," and said, "I will recoup the losses one way or another and make money from stocks."
A college student surnamed Jeong (22) in Seongbuk District, Seoul, also recently invested 6 million won in stocks, saved from part-time jobs at a convenience store and a cafe. The money was originally intended for living expenses and travel, but with daily headlines about a surging market and a flood of friends posting profit screenshots, Jeong joined the investment rush in impatience.
Following tips from stock communities and open chat rooms on social media, Jeong repeated short-term trades and at one point lost nearly half of the principal, even deleting the MTS. But after a few days, the app was reinstalled. Jeong said, "I feel a strong pressure that just working hard and saving isn't enough," adding, "I keep feeling anxious, but I go back in again."
This investing fever among people in their 20s shows up in the numbers. According to the office of Kang Min-guk of the People Power Party, margin loan balances among people in their 20s at Korea's top 10 securities firms (Mirae Asset, Korea Investment, Samsung, KB, NH, Shinhan, Meritz, Kiwoom, Hana, Daishin Securities) stood at 423.9 billion won in the second week of last month, more than double from the same period a year earlier (188.8 billion won). Daishin Securities' analysis also showed that in Apr., the growth rate of new account openings among people in their 20s was 308.4% compared to Jan., the second highest among all age groups after those in their 30s (352.6%).
The problem is that despite the investing fervor fueled by debt, the actual report card is lackluster. According to Shinhan Investment & Securities, in the first quarter this year, the average revenue for individual investors was 8.48 million won, but the average revenue for people in their 20s was 1.43 million won, the lowest among all age groups. Market experts say this is because investors in their 20s, with weaker information advantages, focused on high-risk short-term trades such as leveraged products or theme stocks.
Given this, the scene in college investment clubs is also changing. Investment clubs write corporate and industry reports like securities firm analysts or form teams to compete in live trading contests. In particular, as "FOMO" has spread recently, more students are joining simply out of interest in investing itself, regardless of their career paths.
At Dongguk University's Finance Investment Society, about 30 people applied for 15 spots even in 2024, but 43 applied in the second half of last year and about 50 in the first half of this year. Nam Ju-ho (25), who served as the club president, said, "In the past, it was centered on students aiming for careers in finance, but recently there has been a surge of beginners interested in investing itself," adding, "With the market so hot lately, you can sense a mood of chasing short-term trends rather than value investing."
Ryu Min-jun (26), president of the Global Value Investing and Fintech Research Society at Hankuk University of Foreign Studies, also warned about the FOMO mindset spreading on campuses. Ryu said, "There has been a sharp increase in students expressing anxiety like, 'Shouldn't I jump in even now?' and 'Everyone else is making profits but I feel left out,'" diagnosing, "When a specific sector or theme stock soars in a short period, a chase-buying mentality prevails as people try not to miss the move."
Experts say the fact that college students gain investing experience is positive, but the recent campus investing boom is skewed toward high-risk short-term trading rather than long-term investing. In particular, pouring even borrowed money into leveraged and inverse ETFs that track twice the volatility of the underlying asset can lead to disastrous outcomes, they note.
Kim Yong-jin, a professor of business administration at Sogang University, said, "Lately the market is so volatile that it can swing more than 5% in a single day," adding, "College students, whose earned income is relatively small, may find it very hard to recover if they borrow to invest and then take losses." He added, "Marketwide, if excessive speculative money spreads, it will damage the soundness of the capital market and only amplify volatility."