"Should I Invest Now for Double Returns?" Following the Investment Frenzy [Dito Society]

⑤When swept up in an investment frenzy, losses are common
Blind investing for fear of missing out on a bull market "FOMO syndrome"
Fraud schemes using "stock experts" to steal money
"Beginners should not trust influence or follower counts"

Editor's NoteThe Seoul National University Consumer Trend Analysis Center has identified 'Ditto consumption' as one of the top 10 keywords for 2024. Ditto, derived from the Latin word meaning 'the same,' refers to the tendency to follow celebrities' tastes and trends exactly when purchasing products or consuming content. This article analyzes the blind 'Ditto' phenomena in Korean society, such as the decreasing age range of luxury goods consumers and the increasing trend of trend-chasing investments.

#. Office worker Choi Min-jung (28) recently invested in domestic defense-themed stocks such as Hyundai Rotem. This was after former U.S. President Donald Trump became more likely to run for re-election following a shooting incident on the 13th, leading to increased expectations for defense stocks categorized as 'Trump trades' (a phenomenon where funds flow into stocks benefiting from Trump's election). She came across this news on YouTube. Choi said, "I was watching a YouTube channel run by an influencer and felt that if I missed it now, the prices would go up further, so I quickly jumped in."

The recent investment trend sweeping the financial industry is 'Ditto investment.' Borrowed from 'Ditto consumption,' which refers to the consumer trend of purchasing products recommended by influential figures, this trend shows a tendency to follow certain individuals or trends in investing as well. Since most people invest by following others without sufficient knowledge, they are easily swayed by misinformation, which poses a high risk of investment losses. There is also a risk of exposure to anxiety symptoms related to missing out or being left out, known as Fear Of Missing Out Syndrome (FOMO).

Employees are working in the dealing room at the Seoul Hana Bank headquarters. Photo by Heo Younghan younghan@

On the 27th, the investment industry expressed concerns that Ditto investment and FOMO investing are likely to appear in cases such as the formation of related theme stocks and volatile price fluctuations following the government's announcement of oil and gas exploration in the East Sea, the influx of money into political theme stocks during elections, and the rise of cryptocurrencies after the Trump shooting incident. In reality, it is common to see stocks like Korea Petroleum, which are unrelated to oil and gas drilling, surge after the government's announcement of oil and gas reserves in the East Sea, or political theme stocks formed simply because politicians and company representatives share the same alma mater or hometown, attracting large amounts of money.

The greatest danger of Ditto investment and FOMO investing is that, due to investing without proper knowledge, investors are vulnerable to fraud and losses. Social networking services (SNS) are often used as platforms by fraudulent criminal organizations posing as 'stock experts' or 'investment masters' to swindle investors' money. In July last year, housewife influencer A was sentenced to eight years in prison for causing losses exceeding 500 million won each to seven victims, having received about 11.08 billion won from them between April 2017 and July 2021.

On Instagram, A, who was called a 'stock expert' and 'stock day trading goddess,' posted manipulated photos of stock investment profits along with pictures of luxury foreign cars and designer goods to flaunt her wealth. She also shared a harmonious family life with her husband and son, gaining the trust of victims. Believing her, the victims entrusted her with proxy investments and ended up losing their money. However, it was revealed that she had actually incurred losses of about 4 billion won through stock and futures trading and was in such financial difficulty that she could not pay credit card bills or apartment maintenance fees.

[Image source=Pixabay]

Professor Lim Myung-ho of Dankook University’s Department of Psychology warned about the halo effect when investing in stocks. The halo effect is a type of social perception error where one makes non-objective judgments about a subject by focusing only on certain characteristics. He emphasized that one should not trust a subject based solely on visible factors such as the number of followers or displays of wealth on SNS.

Professor Lim said, "People are easily deceived by the illusions created by the halo effect and become victims of fraud. When someone has many SNS followers and presents themselves well, they seem like economic experts and gain trust. Many investment fraud cases occur through SNS," urging caution.

Professor Choi Jong-sul of Dong-Eui University’s Department of Police Administration said, "Beginners or those unfamiliar with investing tend to rely on influential people, and many cases exploit this psychology to swindle money. Investing blindly based on influence or claims of expertise without basic knowledge is extremely dangerous," he warned.