I’ll boldly assume that the investing public is getting younger and younger throughout the years. Same here in the country, people are getting into the stock market a lot younger when compared to years ago.
More and more people are getting into stocks trading and stocks investing. And I also think that more and more of the younger generation are getting involved. Whereas decades ago, the stock market appeals only to the more adult population who are more financially literate (back then) and who have the money to risk, now I think the younger generations are getting more and more financially literate – hence inclined to investing (or speculating) in the stock market as well.
In short, I’ll boldly assume that the investing public is getting younger and younger throughout the years. Same here in the country, people are getting into the stock market a lot younger when compared to years ago. So what is the effect of that to the stock market, I’d like to ask?
It all boils down on how we view the younger generations. To the stock market in general, this should be good in the long run since the more investors there are, the more trades that will happen and the more fees earned for the stock brokerage firms. More customers for the stock market and its players.
I assume that the younger generation will generally be more aggressive and flighty than the older counterparts. There is youth in them, the longer time for them to recover, the boldness and perhaps the remnants of feelings of invincibility. Likely they are risk-takers. Whereas the older more seasoned investors will be more mature, careful and prudent, likely because they are already saving up for a family or for retirement, so they are more risk-averse.
A younger generation involved in stocks may lead to more speculation. This is in my view only, since in my opinion, the younger ones are more easily swayed by emotions and rumors and more susceptible to urges of greed and fear. Whereas older people will be more resilient, perhaps used to the daily volatility already. And they are keen to distinguish valid leads from baseless rumors.
This is just me. But overall, I am happy that more and more Filipinos are getting into stocks, that we get to start at a younger age, when compared to how old our fathers and mothers got started. There is more drive and public attention now to be financially literate, more and more written works talk about why and how we should invest in stocks. More and more Filipino blogs talking about the stock market. Even Bo Sanchez writes about how his maid invests in the stock market and why we should too.
In spite of the inexperience of a more sizable investing public affecting the stock market shifts in the short run, I’d say that this has beneficial effects in the long run. The more we educate and the more financially literate Filipinos out there, the better.
PS. I started with the stock trading game in PSE when I was in 4th year college. I know a few who have started to dip their toes in the treacherous ocean of the stock market as early as senior high school. Dangerous at first of course, but should they survive, they have at least +4 years advantage over me to grow or deplete their resources.