Young investors chasing quick cash now count losses

PUBLISHED : Sunday, 26 April, 2009, 12:00am
UPDATED : Sunday, 26 April, 2009, 12:00am

Young Hongkongers with a risky appetite for quick cash are investing a large part of their income in stocks and other financial products, but most have suffered losses in the financial crisis, a survey has found.

The Chinese YMCA of Hong Kong polled 526 residents, aged 18 to 30, from December to March, to try to understand their investment behaviour. Many were students.

It found that 74.3 per cent of respondents invested in the stock market, 39.9 per cent in funds, 19.8 per cent in foreign-exchange markets and 19.6 per cent in derivatives.

Most respondents had booked losses in the financial crisis, with 7.8 per cent losing HK$50,000 to HK$100,000, 31.6 per cent losing HK$10,000 to HK$50,000 and 21.7 per cent losing less than HK$10,000.

Asked about their motive for investing, 32.5 per cent of respondents said it was to make a quick buck, 22.8 per cent said it was for personal satisfaction, and 21.9 per cent said they were testing their judgment.

However, the downturn seems to have raised young investors' awareness of the risks.

Asked about their investment considerations before the financial crisis, most respondents cited their personal financial status, but only 35 per cent included 'the understanding of investment products' in their key considerations.

However, 63.7 per cent of respondents said that after the financial crisis began, the risk level of investment products had become one of their key considerations. Nearly half of the respondents had received money from their family members to make investments. Some 3.5 per cent of respondents had used credit card loans to invest, but nearly 60 per cent of students among the respondents had used their entire monthly incomes to invest.

Chinese YMCA issued some recommendations in response to the survey. Youngsters should view investments for the long term, it said.

If they were interested in the stock market and finance, they should consider pursuing a proper career in the industry.

Schools should also strengthen education in finance and parents who gave their children money to invest should offer advice about potential investments.