[Real-Life Finance] Stocks Plunge Again and Again... The Screams of Gaemi Investors

Examining 10 Stocks Popular Among Retail Investors
Last Year Saw Market Boom with Decent Gains
This Year, All Show Zero or Positive Returns
Trying to Average Down Risks Losing It All

No January Effect This Year, KOSPI Drops 11%
6Man Jeon’s Slump, Falls Over 15% to New Lows
Experts Advise "Aim for Q2 Rather Than Buying at Current Lows"

‘7% vs -21%.’

These figures represent the average returns of the top 10 stocks most purchased by individual investors last year and this year, respectively. If investors increased their stock investment proportion recalling the market briefly faltering early last year before surging to the 3300 level, they inevitably received disappointing results. Due to the growing influence of external variables, none of the top 10 stocks bought by individuals this year recorded positive returns.

According to the Korea Exchange on the 28th, the stock most purchased by individual investors this year was Samsung Electronics, with a total purchase amount of 9.8993 trillion KRW as of the 25th. Other stocks bought in the trillion KRW range included NAVER (1.7794 trillion KRW) and Kakao (1.4257 trillion KRW). Additionally, Hyundai Motor (937.3 billion KRW), KODEX Leverage ETF (764 billion KRW), Doosan Enerbility (737.4 billion KRW), TIGER China Electric Vehicle ETF (683.8 billion KRW), Samsung Electro-Mechanics (676.2 billion KRW), SK Hynix (639 billion KRW), and Krafton (631 billion KRW) were also heavily purchased.

However, the performance of individual investors has been dismal. Most of the stocks they bought declined, and it is expected that the majority of individuals are experiencing a bleak start to the year. Even Samsung Electronics, the most purchased stock, plunged 15.65% during this period. It has been continuously falling toward the bottom and has not escaped the ‘60,000 KRW per share’ range since last month. The returns of other stocks are similar. NAVER fell 23%, Kakao -21%, Hyundai Motor -13%, Doosan Enerbility -2%, Samsung Electro-Mechanics -16%, SK Hynix -15%, and Krafton -47% all declined.

This is due to the Federal Reserve (Fed) and major central banks’ eagerness to raise interest rates rapidly, coupled with persistent high inflation caused by the prolonged Russia-Ukraine conflict, which has shaken global stock markets. The ‘January effect,’ where stock prices typically rise more than in other months due to investors’ optimistic outlook at the start of the year, was rendered meaningless as the KOSPI fell more than 11% in January alone.

In contrast, individual investors’ performance a year ago was markedly different. Despite inflation concerns, the Fed maintained accommodative monetary policies, leading to a stock market boom. Corporate earnings were also favorable, pushing the KOSPI up by 10% during that period, surpassing the 3000 mark.

Looking at individual investors’ portfolios during the same period last year, the largest holdings were Samsung Electronics (17.4094 trillion KRW), Hyundai Mobis (2.0856 trillion KRW), SK Hynix (1.095 trillion KRW), Hyundai Motor (1.067 trillion KRW), Kia (1.6668 trillion KRW), LG Electronics (1.4871 trillion KRW), Samsung SDI (1.3924 trillion KRW), SK Innovation (1.2631 trillion KRW), SK Biopharm (1.1113 trillion KRW), and NAVER (801 billion KRW). Except for Samsung Electronics (-0.24%) and SK Biopharm (-23%), all stocks posted positive returns.

Experts note that psychological factors have been excessively reflected in stock prices, leading to an expanded decline in large-cap stocks. They suggest that approaching the market from a low-price buying perspective is valid but recommend waiting a bit longer before purchasing. The Research Center at Daishin Securities stated, "With the acceleration of monetary policy normalization and increased economic uncertainty, somewhat higher volatility will continue. There is no need to rush into the stock market, but it would not be unreasonable to use the increased volatility in the second quarter as a buying opportunity."