During COVID-19, the stock market has been getting much attention, especially from Generation Z to Millennials. Campus students are increasing stocks and virtual currency investment in the context of a frozen job market and uncertain future. Let’s talk to stock market expert Park-Minsu, known as Sandtigershark, about stock trading’s effects and prospects.
Q1. What is the reason why the stock market interests a lot of people?
With property prices skyrocketing, young people find it difficult to buy their own house or apartment. 20s, 30s generations are using financial technology thanks to banks’ zero-interest rate. Most of Seoul’s 20-pyeong (700 square feet) houses cost more than 800 million won ($700,000). During COVID-19, it’s difficult to purchase a share or obtain a loan, therefore students’ interest in the stock market.
Q2. How to succeed with stock investment?
Most people who start investment want to get a lot of money at once. There is the ‘snowball’ effect. It means a small snowball rolls and get bigger to become a snowman. This snowball benefits from the ‘compound interest effect’. If you reinvest with the principal and interest sum, you will succeed. The biggest risk is climbing 10 steps at once. Even if it’s hard, buy good corporation’s stock and be patient.
Q3. Which stock to invest for a 20 year-old who just started investing?.
Investing for short-term reward and jumping to stocks without proper analysis of the company’s value is hard to expect luck. This investment is an uncertain occupation. You shouldn’t increase the invested money, trying out various types of investment is a better path. If you have your own philosophy, invest along you're your know-how.
Q4. What is the future prospect for the stock market?
Stocks’ prospects always change. If money supply decreased because of inflation, they will lose money. U.S. Secretary of the Treasury Janet Yellen warns to prepare for austerity. The COVID-19 pandemic has increased the performance of some companies. Because of this growth, the danger of variability limits the performance. Therefore, in the second half of the year, a conservative approach is needed.
Q5. In contrast to the plummeting financial market of the past, how do current stock market changes impact society?
With COVID-19 restricting gatherings to three people, the so-called ‘Donghak ants’ effect took hold. It describes the recent buying spree and active trading style of people making small investments. This revitalization of stock investment plays a role in reducing the safety net of the stock market. Korea always follows other countries. Recently, foreign investments mainly target the semiconductor sector, which the ‘Donghak ants’ do not focus on.
Q6. Why is 20s-to-30s’ interest in the stock market growing?
I think their motivation is to earn money in a short period and live without worries
Q7. In the post-COVID-19 era, how is the stock market going to change?
Until now, it is a transitional period. The existing growth of stocks is turning to business-sensitive stocks. When the economy returns to normality, stock retailing will back too; travel, physical distribution, duty-free shop, aviation will regain a strong growing power that increase international oil prices.
Q8. Some college students use their loans for investment, what do you think about this?
Using this lever makes us win easily, but it is risky. One should be careful, even if you have good skills and results. It is unreasonable to invest massively. Also, a loan is the worse instrument to use for investment.
Q9. Do you have any advice to college students who are carrying out investment?
First, study hard. If you study like high school seniors, you will success. Second, develop your own ideas. Investment is based on your own idea. Third, watch the news. Financial information is in the news. Fourth, care about value when investing. If you ignore the values of region and only look at charts or try to earn money quickly, investment will be very difficult. Lastly, invest in high-yield dividend stocks. Even if it’s a little slow, keep investing.
Q10. Do you recommend the 20s to invest in stocks?
I recommend doing it when you are young. If you overlook investment and only work as an employee, you will live stuck at your own level. In the end, you cannot move into the capital area and pushed back from society. Now, the focus on jobs will end. Getting promotion is getting ever harder, the reason why we should practice investment.
Stock investment, which recently attracts the 20s and 30s still draw the attention of other generations. Carry out investment after having done your own work well. Through various experience study hard and practice, you will success. If you fail, consider other ideas and train by taking investment notes. If you reduce the risk, you will not suffer even as you focus on essentials.
