"You said it would never crash!" A portfolio built on the S&P 500 Index is suddenly down 18%... a mentally draining six weeks [World of Retail Investors]

[The Financial News] Mr. Park is in his 30s and works for a small to mid-sized company in the Seoul metropolitan area.His investment philosophy is simple: "Don’t get greedy. Just earn a bit more than a savings account."His coworkers are good at analyzing individual stocks and reading market trends, so they seem to make money on almost every investment. But for Mr. Park, who only started investing in stocks three years ago, it still feels difficult.

There is one line that Mr. Park has believed in almost religiously."The S&P 500 Index will keep trending upward as long as the United States doesn’t go under."That was what the colleague who first encouraged him to invest told him. He had heard it dozens of times on YouTube and hundreds of times in stock-investing communities. They all said there was no need to complicate things by picking individual stocks—just buy it every month and you’ll do better than a savings account.It was a product that fit perfectly with Mr. Park’s investment philosophy.
So since 2023, Mr. Park has been putting 500,000 won a month into an S&P 500 Index Exchange Traded Fund (ETF). His rule was simple: buy steadily every month, and don’t look at the market whether it goes up or down. For more than two years, that rule never seemed wrong, and the S&P 500 Index in his account kept sailing smoothly.
The first time his philosophy—and his faith—started to waver was this March.
At the end of February, a full-scale conflict broke out between the United States and Israel on one side and Iran on the other. The Strait of Hormuz was blockaded and oil prices surged. In the first quarter alone after the war began, the S&P 500 Index fell about 7%, marking its worst quarterly performance since 2022. Mr. Park’s ETF account showed a return of minus 18%.When a portfolio that was supposed to "beat a savings account" suddenly went into the red, Mr. Park found himself constantly opening his brokerage app, even though he knew he shouldn’t.To make matters worse, all the news sounded grim. With no end to the war in sight, soaring oil prices were stoking inflation, and the Federal Reserve System (Fed) was not cutting rates but sticking to a hold. The premise of "as long as America doesn’t collapse" suddenly felt unfamiliar. What if the war drags on? What if the Strait of Hormuz stays closed? Anxious scenarios piled up in his head.
"Buy when there’s fear, sell when there’s euphoria."That phrase flashed through Mr. Park’s mind. "What am I trying to do right now? Shouldn’t I be buying more while it’s cheap?" He knew in theory that a bear market is a buying opportunity, and that the whole point of regular investing is to accumulate more units when prices fall. But once he actually saw his account in the red, his hands froze. Instead of buying more, he even considered canceling the automatic transfers he had set up for his monthly investments. The rule he had kept for two years began to shake.
In the end, Mr. Park did nothing. He didn’t dump his S&P 500 Index holdings out of fear, but he also didn’t enjoy the "bargain sale" and buy more. He simply closed the app and focused on his work, trying to erase the downward curve of the S&P 500 Index from his mind.
After six weeks passed, CNBC reported on the 14th (local time) that the S&P 500 Index had fully recovered to its pre-war level. It was now only about 1% below its all-time high. Taking into account the historically high rate of earnings beats, the first-quarter net profit growth rate of S&P 500 Index companies is projected to reach around 19%.
The market was digesting the war as a short-term negative factor.During the six weeks when Mr. Park was trembling with anxiety, the market quietly returned to where it had been.Naturally, Mr. Park’s account also recovered its principal. He suddenly found himself revisiting his core belief: "As long as America doesn’t collapse, the S&P 500 Index will keep trending upward." He realized that for this formula to work properly, one condition has to be met.When the market wavers, I must not waver.

bng@fnnews.com Reporter Kim Hee-sun Reporter