November 4, 2024
JAKARTA – Success stories among their peers and a plethora of user-friendly investing apps are luring ever more young Indonesians into the stock market, but some learn the hard way that risk and opportunity go hand in hand.
According to a new Financial Services Authority (OJK) report, the number of investors, or people holding a single investor identification (SID), reached 14.21 million on Oct. 22, up 17 percent since the beginning of the year, and 55 percent of them are now below the age of 30.
“[This] shows the growing interest in the capital markets among the young generation,” states the report, which was published on the OJK’s Instagram account on Oct. 25.
Many of the new generation are active stock-pickers rather than entrusting their funds to a mutual fund.
One of those investors is Isya Yusril, a 27-year-old entrepreneur who began dabbling in the capital market seven years ago. What drew him to stocks was that one could get going with a small sum.
“I only needed to have at least Rp 100,000 [US$6.36] to start. [The reason] why I like investing in the capital market is because there are not many obstacles for young people who don’t have much money,” he told The Jakarta Post on Tuesday.
He admitted to experiencing investment losses and low returns during his early years.
“I certainly have [experienced losses], especially [in the beginning], but with a small budget, so it didn’t have a big impact [financially]. The learning curve took quite a while,” he said, adding that ups and downs were part of the investment learning process.
“So, the losses didn’t stop me; instead, they made me eager to learn and find more potential in the market.”
Isya explained that he used his income earned from gig work as an online driver and from building small businesses to develop his investing habit. “Investing is a lifestyle that needs to be maintained, in addition to learning the theories,” he said.
While studying at university, Isya also worked at a securities firm, allowing him to expand his knowledge of investment. Early in 2020, he predicted an economic downturn and strategically lined up approximately Rp 2 billion to invest in stocks by cashing out from earlier investments and adding funds from bank loans and other sources.
Following the economic recovery, he realized a return of around Rp 14 billion.
He insists it takes more than luck to win in the market and emphasized that young investors should be more critical of their own judgment before investing.
“Maybe because of the influence of social media content, [the young generation] have the mindset to find shortcuts by speculating,” he said, underscoring the importance of relying on research and blocking out the noise of online hype.
Faiz Akbar, an entrepreneur and content creator based in Malang, East Java, began investing when he was 18. Introduced to the capital market by a friend, he admits that investing was once confusing but “got more interesting” as he dug deeper into stock market analysis.
He now calls himself a day trader and investor, and with more than 150,000 followers on Instagram, Faiz regularly provides analysis and tips for trading, sharing his investment insights.
“So far, my returns from investment have been quite significant, [allowing me to] have stable savings, emergency funds and more flexibility to allocate personal finance for other important purposes and opportunities,” he revealed to the Post on Thursday.
Faiz suggests that young investors start small while learning the basics and diversify to mitigate risks.
He also warns the younger generation against the fear of missing out, better known as FOMO, a risk perpetuated by social media. “Patience is important, because investment is a marathon, not a sprint,” he said.
Not everyone wins
Putu, a young investor based in Bali, has decided to quit the capital market for the time being. Speaking from experience, he pointed out that acting on hype was not worth the risk.
Having experienced a significant investment loss, which he blamed on the influence of “a market maker”, he is now starting over, rebuilding his capital for future investments.
He still believes investing in the capital market is generally a good strategy for young people to “preserve and grow their wealth”.
The market could keep pace with inflation, and the value of investments could increase over time, especially in healthy companies, he explained to the Post on Friday.
Attracting the young generation has been a conscious effort by the authorities to increase investment in the country.
Indonesia Stock Exchange (IDX) development director Jeffrey Hendrik said the bourse was committed to developing the capital market in Indonesia by establishing its Capital Market School and Investment Gallery (IG) and by conducting targeted campaigns.
“The IDX IG is our strategy to bring the world of capital markets closer to academics, the younger generation, and the community. We want to instill an investment culture from an early age, as well as encourage the regeneration of smart and investment-literate [Indonesians],” he stated in a press release in September.
IDX president director Iman Rachman said the rise of stock investors reflected confidence in the capital market despite global and domestic economic uncertainty.
“Retail investor participation remains steady, with overall domestic investors still dominating, both in terms of ownership and transactions,” Iman said in the same press release.