tech

Do many people born in the 1990s invest in stocks?

Answer: They buy funds, are they the same as stocks?

Do many people born in the 2000s invest in stocks?

Answer: What are stocks, are they as fun as the crypto world?

There are statistics showing that the average age of stock investors is around 46 years old.

Stock investors under the age of 30 make up no more than 3%.

Regardless of whether the statistics are completely true, it is indeed rare to see young stock investors around.

The younger generation is now more interested in more exciting things, which are all dual-sided transactions. For stocks that can only be long and have restrictions on price limits, they seem to be uninterested.

The problem of generational gap in the stock market is similar to the problem of young people not drinking Maotai.

But if you delve into the essence, this problem is actually different.The question that truly deserves deep contemplation is: does the stock market need the fresh blood of ordinary retail investors?

The stock market requires capital, which is beyond dispute.

In the early stages of the stock market's development, the proportion of capital from retail investors was very high.

It can be said that before the emergence of mature investment institutions, this market was almost entirely composed of retail investors.

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The A-share market can basically be described as a market for retail investors, and it is an extremely large market for them.

Later, as time passed, the concept of "big investor rooms" gradually emerged, and then naturally the concept of "market manipulators" came into being.

Market manipulators are nothing more than an organization with a much larger capital volume, capable of completely influencing the direction of stock prices.

After that, regular forces began to enter the market.

Insurance funds were the first to take the lead, followed by public funds, then social security funds, and finally private equity funds.

Compared to the speculative capital and private traders who hold seats, the proportion of these regular forces is also increasing.Later on, foreign capital and northbound funds and so on came into play.

Nowadays, the proportion of total funds held by retail investors has dropped from the original peak of over 90% to just over 20%.

This does not mean that retail investors are no longer important.

But it represents that the main players in the market have changed, and the way they prey on each other has also changed.

The era of the market dominated by the "big fish" model, reaping the "retail investors' crops," has gradually passed.

The way the market game has also changed.

Apart from some algorithmic trading, which still indiscriminately harvests short-term trading retail investors.

Most trading methods have begun to shift towards pure game-playing between large funds, rather than the reaping model.

Of course, whether it is large or small capital, the underlying transaction is actually converging.

Or there are disagreements, and then unifying disagreements, which can be seen from the market's trading volume.The current market fluctuations, corresponding to the volume, are not as large as before, and the game and unification are gradually being established.

What will the future retail investors be like?

If large funds continue to be introduced, the proportion of retail investors will become less and less.

This is actually a good thing for those retail investors who survive and continue to stay in the market.

Because, retail investors will not be the main group targeted by large funds.

It's like a stock with a daily transaction volume of 10 billion, the ones to be harvested are definitely not the retail investor group.

Instead, it is the main force holding hundreds of millions or billions, harvesting the same large funds holding hundreds of millions or billions.

Even if there are no new stock investors, not too many fresh blood, it doesn't matter.

There is also a key issue, which is the number of stock investors, essentially also depends on the market's money-making effect.Each peak of market entry occurs during a bull market, rather than in the current half-dead market.

When the market shows a relatively good profit effect and everyone is shouting that the bull market is coming, the funds will come.

The funds here are not only retail investors, but more importantly, a kind of joint force.

The main force among retail investors will not be the new generation, because they have no money.

The group of people with money among the current retail investors is still the 40-50 year old crowd, that is, the post-1970s and post-1980s generations. They are the real main force of retail investors in the future.

Secondly, there will be a significant change in the ideology of retail investors.

Different eras determine different retail investor ideologies.

The last generation of retail investors had dreams of restructuring.

The last generation of retail investors were better at finding and discovering "manipulated" stocks.

The last generation of retail investors believed that the stocks that were pumped up were all junk stocks.Even the new generation of retail investors, who may not have made money, have a different ideology.

They believe that professionals should do professional things, even if they find out in the end that they have been deceived again.

They believe in value investing, even though value investing has also left them scarred.

They believe that high-quality stocks will eventually turn around, and high dividends can provide stable returns, and they have indeed tasted the sweetness.

As the market players change, the direction of the entire market is also changing, which is bound to happen.

The development of the fund market and the expansion of the ETF market are signs of the maturity of retail investors.

What we often mention, the de-retailization, is not that there are fewer and fewer retail investors, but that retail investors have been upgraded.

The upgrade refers to the following points.

1. Normalization of investment mentality.

This is easy to understand, not entering the market with too much of a gambling mentality, and the main money used is idle money.Compared to some people who regard stock trading as a way to turn their lives around, more people choose to treat stocks as a part of asset allocation.

1. The investment mentality is more stable, and it will not lead to a lack of appetite for food and drink due to the rise and fall of the stock market. It is possible to treat stock investment with a normal heart.

2. Investment forms are diversified.

The form of investment is no longer limited to stock investment.

Funds, ETFs, convertible bonds, and even futures and options products will be involved.

Diversified investment is a trend, young people are more willing to try new varieties, and the original old stock investors will also use new tools more.

3. Expectation management is rationalized.

The so-called expectation management refers to the returns in the securities market.

Many people used to regard stock trading as an important shortcut to wealth, and they entered the stock market with the mentality of getting rich.

It is clear that this approach is not feasible.Now, individual investors are gradually becoming more rational, and they also know that an annual return of 20-30% is comparable to that of Warren Buffett.

The more comprehensive the understanding of the market, the more reasonable the expectation management becomes.

So, there is no need to worry about the future market being de-individualized; individual investors are just upgrading and becoming more adapted to the market.

As for the generational gap, it is normal for the younger generation not to enter the market, as they have their own era's investment products.

But the stock market will definitely continue to develop for decades or even centuries, with the market becoming more mature.

As for some of the points that we criticize, they will also gradually be corrected and standardized in the process of market development.

The A-share market, in about 30 years, has completed the journey of mature markets that took 80-100 years, and it is inevitable that there will be some bumps along the way.

Looking at the global stock market, the participation of individual investors in the A-share market is something that other markets can only look up to, which has also allowed some people to make money in the rapid development of the market.

Survival of the fittest is an eternal theme, and it is the same everywhere.