"A New High? I Was an Involuntary Long-Term Holder, Basically a Hostage"... Relieved Even After Cutting Losses in 'Nekao' [World of Retail Investors]

'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.
01%, from the previous session. 03.It later slipped back into the 6,380 range in the afternoon, but it had still moved well beyond its previous peak. Everyone around him called it a bull market."Platforms do not betray you" — Five years of buying and holding Naver and Kakao Kang opened his brokerage app and sold off the last few domestic stocks he still held. Some were in the green, others were still in the red, but it did not matter.
'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.
Kang first bought Naver and Kakao in 2021, when the platform craze was in full swing. At the time, Naver was trading in the 450,000-won range and Kakao in the 120,000-won range.
It was a period when everyone was piling into 'Nekao,' saying things like, "They are Korea's Google" and "Platforms do not betray you. " Brokerage reports kept raising target prices, and Kang invested 5 million won in each stock, or 10 million won in total.But the glory of 'Nekao' was short-lived, and the pain lasted much longer. When the cold wind of interest rate hikes blew in 2022, Nekao, symbols of growth stocks, were among the first to freeze.Naver was cut in half, falling into the 200,000-won range, while Kakao plunged to the 40,000-won range, down nearly 70% from its peak.
Even so, Kang did not sell and kept holding on.Believing that it would rise someday, he even kept averaging down whenever the price fell, buying a little more each time.That was how Kang became an 'involuntary long-term investor.' "Even while playing with the kids, I kept checking the stock app.I just decided to dump it" — the decision to cut losses As time passed, the KOSPI Composite Index repeatedly broke its previous highs on the back of artificial intelligence (AI) and semiconductor gains.
'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.
Naver had recovered somewhat, but it was still only about half of its peak.
Kakao remained about 68% below its high.
Naturally, his account was still in the red.Even when friends who did not know his situation joked, asking how much he had made in the bull market, Kang felt his insides burn.That is why, when this latest rally began, he decided to simply dump the stocks.He managed to sell Naver at roughly breakeven after averaging down, but in the end he locked in a loss on Kakao.The result of holding on for so long was a negative return, but Kang said he felt relieved.For the past five years, Kang's daily life had been held hostage by 'Nekao.' Even in the bathroom, during lunch, and even while spending time with his child, he would habitually open the app and check the blue numbers.On days when Kakao fell further, he felt down all day, and when Naver rebounded 1% to 2%, the whole world seemed brighter.He tried to comfort himself by saying he was "just long-term investing," but as his losses grew, he could not help sighing.The thought, "If I had known this would happen, I should have bought more Samsung Electronics," crossed his mind a dozen times a day.Avoiding realized losses is an instinct.while time, emotions, and opportunity costs pile up From the perspective of investment psychology, Kang had fallen into the trap of the 'Sunk Cost Fallacy.' The sunk cost fallacy refers to the tendency to keep holding on because money already lost feels too painful to give up.
'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.
Thaler, who won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2017.Psychologists Hal Arkes and Catherine Blumer defined it as "the more money, time, and effort that have been invested, the stronger the tendency to keep pushing forward." That is because people instinctively avoid the moment when a loss becomes final.As a result, they keep pouring money and time into stocks with little chance of recovery.Meanwhile, other opportunities quietly pass them by.Of course, there is some regret.When he saw the news that the KOSPI Composite Index had broken above 6,400 intraday, Kang wondered whether he should have just held on, then shook his head.
A record high in the KOSPI Composite Index does not necessarily mean Naver and Kakao will recover.Even if the index had risen further, his account would still have been in the red.Moreover, if you include the time, emotions, and opportunity costs he endured while holding Nekao over the past five years, it may not have been a bad decision to cut losses after all.I do not want to become someone who keeps saying, "I should have bought, I should have sold, I should have held on.
'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.'The KOSPI Composite Index breaks above the 6,400 mark intraday for the first time ever. sets another all-time high.
bng@fnnews.com Kim Hee-sun Reporter