Strong market performance and reduced barriers to entry have prompted a growing number of young people to start investing in recent years. But that enthusiasm is also leading some to engage in risky behavior.
Taoyuan resident Jenny Chen got her start investing in Taiwanese stocks six years ago, persuaded by a family member to buy in after she switched jobs and started making more money. Now aged 29, she sometimes sets aside a portion of her income as a Chinese instructor to buy stocks and other securities. She has seen some impressive returns amid Taiwan’s historic stock market rally.
“I don’t really have a goal in mind, it just gives me a certain sense of accomplishment,” she says of her investing. “Of course, when the timing is right, the returns are pretty good, but the main thing is just the feeling of having some money to use freely.”
Chen is just one of millions of Taiwanese who have begun staking some or all of their financial future on the island’s stock market in recent years. That represents a remarkable shift from the investment strategies of their parents’ and grandparents’ generations, which focused on buying property and often taking out multiple insurance policies.
Interest in stock trading began surging in Taiwan during the Covid-19 pandemic. But the recent bull market has turbocharged enthusiasm. In July, the Taiwan Stock Exchange (TWSE) reported that the number of brokerage account holders in Taiwan rose by 119,000 from the month before to a record 14.6 million — a striking figure given the country’s population of 23 million. Investors aged 19 and younger accounted for the biggest increase.
Fueling the market’s rise is the rapid development of AI, and underpinning that development are Taiwan’s chip and tech giants, most notably the Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40% of Taiwan’s benchmark index, the TAIEX. Soaring global demand for the equipment and infrastructure these companies provide has sent their valuations soaring, pushing the TAIEX to new highs on a near-daily basis. Since the beginning of 2026, Taiwan’s equity market has catapulted past Canada and India to become the world’s fifth largest by market capitalization.
Besides the rapidly expanding market, there are other reasons for the rise in investor interest, TWSE Executive Vice President Tu Hui-chuan told TOPICS in written responses to interview questions. One of those is reduced barriers to entry, thanks in large part to the introduction of intraday odd-lot trading in 2020, which allows investors to purchase fewer than the traditional 1,000-share trading unit.
“Young professionals and first-time investors can now use smaller amounts of capital to invest in high-priced blue-chip stocks, making participation in the market far more accessible,” Tu says. She adds that subsequent reductions to the order-matching interval — the time the system waits before matching buy and sell orders — has made odd-lot trading faster and more attractive to investors.
The ETF explosion
Another factor increasing accessibility for new investors is the rise of exchange-traded funds, or ETFs, in Taiwan’s market. These vehicles have given investors with less capital a way to diversify their portfolios and benefit from the massive growth of Taiwan’s industries.
Tu says ETFs are also changing Taiwan’s market landscape. She notes that these funds are increasingly being used as asset allocation tools, which make them an important source of long-term capital.
“In particular, during periods of market volatility, investors often increase their holdings of Taiwan stock-invested ETFs when prices decline,” she says. “Those ETFs, through their holdings of constituent stocks, help channel capital back into the market, which helps stabilize market sentiment.”
Though the first ETF was introduced in Taiwan in 2003, it wasn’t until 2020 that their popularity began to surge, with the number of beneficiaries reaching over 1.5 million that year, a near-doubling from 2019, according to data compiled by BlackRock Taiwan. That number as of June 2026 is around 18.2 million.
Tiffany Hsieh, BlackRock Taiwan chairperson and co-chair of AmCham Taiwan’s Asset Management Committee, has witnessed the development of ETF investing on the island – from passive index and high-dividend funds in the early 2020s to the introduction of Taiwan’s first active ETF last year.
“The market is now quite mature,” she says. “You now see different client segments, different product types. It’s evolved quickly and quite healthily.” Hsieh says that many young people and retirees have come to view the dividends from their ETF investments as a kind of passive income.
Planning for the future
Not all are looking to make only short-term gains from their investments. Some, like Taipei-based professional Meng-zhou Wu, started their investment journey prior to Covid-19 with mutual funds. Later, he also invested in retirement-oriented vehicles like the Taiwan Individual Savings Account, or TISA. Such accounts, which are similar to the United States’ 401(k) retirement fund, were designed to provide Taiwanese workers with pension options outside the government-mandated fund.
“So now there’s a private choice after the government allowed international asset management companies in Taiwan to start designing and marketing these pension products for the general public,” says Wu, who’s now in his 30s. “And the benefit of these funds is that the government requires them to lower their management fees to the minimum level.”
More recently, he has also begun moving part of his portfolio into the stock market and even invested in the high-performing 00981A active ETF from Taiwanese conglomerate Uni-President after it debuted last year.
“What makes active ETFs more attractive than passive ones is that they have the flexibility to invest in smaller companies that have larger growth potential,” he says. “But you need to get in early before those companies become too big. Otherwise, it just becomes like a passive ETF.”
Still, Wu maintains he is focused on the long game when it comes to investing and has decided to keep his base in mutual funds, arguing it’s a safer option in cases of overcorrection in the market.
“If you invest in mutual funds, you can just apply to redeem them at any time, and they will calculate your redemption price according to the net asset value of that trading day,” he says. “So in a way it’s more flexible.”
Fighting FOMO
Wu’s prudent approach does not appear to be universal for investors his age, however. An alarming new trend among young investors is causing concern: many are going deep into debt to buy into the bull market.
In late June, Bloomberg reported that the amount of money borrowed from Taiwanese brokerage firms to purchase stocks had risen 160% from a year earlier. Several young people interviewed for the article said they decided to take out loans after seeing the big returns their friends and peers were making on their investments.
These often-inexperienced retail investors are not just borrowing cash. Leverage can come in other forms, including mortgages, car loans, and credit card debt. Brokerage firms offer all four options.
This phenomenon has led to the coining of a new phrase in Mandarin, si dai tong tang (四貸同堂), or “four kinds of debt under one roof,” a play on the original well-known Chinese idiom referring to four generations of a family living together in the same house.
The trend has prompted officials, including Central Bank Governor Yang Ching-lung, to warn against using too much leverage. Their concern intensified when the TAIEX fell precipitously in the second half of July, seeing its biggest ever single-day drop. The index has rebounded since then, though fears remain about the risks facing heavily indebted investors.
However, TWSE’s Tu says that such borrowing, which is also known as margin financing, is still within a reasonable range. She says that even during the period of volatility in July, outstanding margin loans fell by 17% from the month before.
“This suggests that investors were able to reduce leveraged positions in a timely manner as market conditions changed,” Tu says, adding that “the market did not experience widespread margin calls or forced selling despite the pullback in share prices, indicating that leverage-related risks remained manageable.”
For some experts, though, too-easy access to leverage could become an issue. Excessive use can increase the risks for everyone participating in the secondary market, where retail investors trade securities among themselves.
“In theory, the very existence of the secondary market is for investors to engage in risk-sharing,” says Lin Tse-chun, a visiting professor of finance at National Taiwan University. But he says that purpose could be diluted by young investors with unrealistic expectations willing to go to any length to buy stocks. “For these kids, I think the idea is if I own [this stock] today, there is a possibility I don’t have to work anymore for the rest of my life.”
Lin, who researches investment behavior, also points to the rise of online influencers and the psychological effects of social media on investors. He says many people have taken to posting their profit and loss statements on popular platforms like Dcard and Threads, which gives their followers the idea that they’re missing out on easy gains.
“There’s this social comparison pressure,” he says. “It’s like, what am I doing here while they’re all already millionaires?”
Some view the impact of investment influencers in a more positive light, though. Blackrock Taiwan’s Hsieh says she’s been impressed with some of the influencers she’s seen, including those who made content about ETFs her firm has recently launched in Taiwan.
“They are like researchers,” she says. “They take a very professional look at our indexing, comparing it with ones we launched in the U.S. and Europe, and ranking the top funds. And young investors here really love to learn, so a lot of them follow the influencers and get more sophisticated over time.”
Still, Lin says, there are other issues at play. He says the proliferation of mobile trading apps has made it much easier for people to start trading but argues that many have “gamified” the practice in a way that could prove socially harmful. Offers of free shares to open new accounts, digital rewards for making trades, and other incentives are designed to get people hooked, he says.
“We know trading can be addictive,” Lin says. “When you put these features into your app, it’s basically like gamified smoking.”
Cautious optimism
Despite some warning signs, TWSE’s Tu sees the influx of young investors as a net positive, saying they represent a counterweight to Taiwan’s super-aged demographic, a feature of society that also impacts the equity market. She says that this new generation is “building a more sustainable pool of long-term capital for Taiwan’s capital markets.” But she says it’s crucial that the financial industry and regulators improve investor education and efforts to boost financial literacy.
Lin of NTU says education is important, but it may not be enough to counteract what he sees as the biggest issue among young investors: overconfidence in their trading skills and the accuracy of information they’re getting from social media and their peers.
“If you are overconfident, you tend to trade too much,” which means paying more in trading commission and tax,” he says. “That could eat up quite a big chunk of your principle.”
Lin says many new investors also tend to positively correlate past strong returns with future ones, leading them to make riskier investments. That could end up paying off in the short run, or it could leave them feeling burned during market fluctuations like the one in July.
Meanwhile, young retail investors like Jenny Chen are staying relatively upbeat about future market performance, while also relying on tried-and-true methods for managing their investments.
“I’m not too worried [about recent turbulence], possibly because my portfolio’s pretty diversified,” she says, noting that she’s been through several global shocks before. “Now I just approach this kind of thing calmly, understanding that the market will probably eventually go back up again one day. I don’t overthink it.”
