Invest
ASX warns against the ‘gamification’ of investing
ASX chief executive Dominic Stevens has warned against the gamification of equities, as young traders lock their gazes on chasing returns at the expense of any real sharemarket knowledge.
ASX warns against the ‘gamification’ of investing
ASX chief executive Dominic Stevens has warned against the gamification of equities, as young traders lock their gazes on chasing returns at the expense of any real sharemarket knowledge.
The ASX chief executive has confirmed he would not hesitate to put companies into trading halts if they experienced massive swings in value – like GameStop experienced last month in the US.
“We have also seen ongoing volatility and volume in the equity market due to COVID and, conversely, stability in the interest rate market due to yield curve control. And post the reporting period, we witnessed the ‘short squeeze’ of certain US equities driven by retail day traders, which has prompted significant global debate,” Mr Stevens said.
The CEO said that while he is pleased to see more people showing interest in the market, he noted that if the markets become a game, “that is not a good thing”.
“You don’t want to put your eggs in one basket and invest because a message-board spruiker told you that is what you should invest in,” Mr Stevens told the media.
“We have seen the gamification of trading overseas, and trends can come down here. But if it becomes a game, people are not thinking about fundamental value in the long term, and I think we should be cautious about that.”
The CEO also warned investors looking to short squeeze in Australia, noting that ASX staff monitor social media platforms such as Reddit and HotCopper to protect the market.
Speaking recently to nestegg, RMIT’s senior lecturer of finance, Dr Angel Zhong, explained that several factors have contributed to the rise in younger investors playing the sharemarket like a casino.
“First, due to COVID-19 lockdown, people had to stay at home. They had so much time but nothing else to do. As such, they turned to the sharemarket. Second, due to COVID-19 restrictions, casinos and other gambling avenues are closed. Sharemarkets have become a substitute for investors to gamble in.”
“Third, stimulus payments become another driving force. Our research suggests that around the world, countries that distribute stimulus payments are associated with higher increase in retail trading.
“Fourth factor is related to social media. There are a lot of investment groups on Facebook, investment channels on YouTube and stock discussion trading forum. Fifth, the stock markets around the world experienced a dramatic decline in COVID-19. The low price lured retail investors’ participation,” Dr Zhong said.
She opined that the tendency of younger investors to get carried away and potentially risk massive losses calls for increased financial literacy.
For more about GameStop and investing listen to our latest podcast.
About the author
About the author
Stock market
Could this bull market be losing steam?
There’s an old investment adage that bull markets never die of old age, with the current market showing signs of cracking just months after the recovery, an industry expert warns. ...Read more
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Stock market
Could this bull market be losing steam?
There’s an old investment adage that bull markets never die of old age, with the current market showing signs of cracking just months after the recovery, an industry expert warns. ...Read more
Stock market
Super fund investors bid to acquire Sydney Airport
A group of super fund investors has lodged a non-binding takeover bid for Sydney Airport, valuing the company at over $22 billion. ...Read more
Stock market
10 most globally held stocks revealed
Australian investors remain bullish on electric vehicles and technology stocks, according to their long-term held positions, new research has shown. ...Read more
Stock market
How ‘gamer investors’ are pushing a new wave of social responsibility
A new generation of younger retail investors are pushing a new social movement, yielding a distributive impact on the markets, most notably through the GameStop saga, two researchers have revealed. ...Read more
Stock market
ASX tipped for record high despite inflation fears
The market is tipped to shake off fears of rising inflation, with the ASX 200 now tipped to close the year at a new record high, an economist has revealed. ...Read more
Stock market
‘Commission-free propaganda’: Warning issued for retail investors
The phrase “if you’re not paying for it, you’re the product” applies just as much to stock trading apps as it does to social media networks. ...Read more
Stock market
Is the tech sell-off creating opportunities for investors?
A tech sell-off sparked by inflation concerns has seen world markets crash. But is it creating an opportunity for investors to ‘buy the dip’? ...Read more
Stock market
Government opens arms to Wall Street
In its bid to maintain Australia’s global competitiveness, albeit its firmly shut borders, the Australian government has included a measure in its recent budget to allow foreign financial services p...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
