Michelle Huynh made a promise in her teens: she would become a millionaire by 30. Now 26, the Australian sales executive for a tech firm is trying to keep that vow by ploughing her savings into the stock market. “Times are so different and investing has become a necessity,” she says. “It feels like our purchasing power is shrinking. This is the only way to combat that.”
This year, the technology-driven surge in stock markets has edged her closer to the goal. With more than a third of her investments in tech stocks, by mid-July that portion of her savings had jumped 50% – a rise of A$31,000 (£16,100). But those gains have since eased to about A$22,000 as the sector enters what she calls a “wild moment”. Huynh says she is prepared for the volatility, viewing the bets as a long-term play.
“Young investors pile into tech stocks as AI boom drives wild market swings.”
The rise of tech stocks, led by firms riding the artificial intelligence boom, has drawn a wave of ordinary investors – many in their 20s and early 30s – even as some analysts warn the fervour around AI may be overblown. Retail investors have been caught up in the excitement, fuelled by social media and marketing aimed at non-professionals, says Glenn Tan from advisory firm Providend.
The tech-heavy Nasdaq in the US is up about 10% this year, while Japan’s Nikkei 225 has risen more than 20%. But the most dramatic swings are in South Korea. Seoul’s Kospi index, which includes tech heavyweights like SK Hynix and Samsung Electronics, jumped more than 50% since January – then plunged from a record high above 9,000 points in June to around 6,500. Trading on the benchmark has been halted seven times this year under a circuit breaker mechanism triggered after an 8% fall.
The rally attracted an army of retail investors known locally as “ants”, which helped fuel the volatile trading. “I could maybe count with my hands the number of people who aren’t investing today,” says South Korean investor U Chan Lee, 30. “Even stay-at-home mothers, like my mum, who has never been interested in the stock market, are now interested.” But the slides have raised concerns over people who borrowed money to invest, prompting South Korean authorities to take action to curb the practice.
For Huynh, the recent pullback is just part of the ride. Having sold many of his shares when the Kospi surged, Lee worried the market was becoming “too overheated”. The question now is whether the young ants will keep betting, or get crushed.