"I Bought Samsung Electronics at 310,000 Won..." The Fearful Experience of Euphoric Retail Investors [World of Retail Investors]

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28. /Newsis \r\n [Financial News] Office worker Kim Byung-cheol, 52, a pseudonym, went from heaven to hell and back on the 28th.
The reason was that on the evening of the 27th, he opened his stock app on the way home from work, saw Samsung Electronics and SK hynix surging, and rushed to buy more, only to spend the next day in anguish. The day Kim bought more shares also marked the launch of South Korea's first single-stock leveraged ETF, based on Samsung Electronics and SK hynix.
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3 million won. On stock communities and discussion boards, too, there seemed to be many people like him who were buying into the rally."I need to get on before it rises further," "SK hynix will keep going up" Believing the uptrend would continue smoothly, Kim thought his timing was not bad. But on the 28th, Kim felt as if he were on a roller coaster all day.The two stocks ended in opposite directions. 44%, failing to hold the 300,000-won level.
05%. 29.
The intraday moves, however, were brutal for both. Samsung Electronics at one point fell nearly 10% from the previous day's high, while SK hynix also dropped to as low as 2,151,000 won during the session.
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Why do people move in the opposite direction? The volatile session, which briefly sank to the 7,800 level before staging a sudden rebound, was likely influenced by several factors, including the United States-Iran war, the release of the United States' April Personal Consumption Expenditures Price Index, and pressure from the exchange rate. But the deeper problem behind Kim's distress was his own psychology: irrational chasing at the top.
Warren Buffett said, "Be fearful when others are greedy, and greedy when others are fearful. " In simple terms, it means to "buy in fear and sell in euphoria." When KOSPI hits a peak, or when stocks you hold hit record highs or surge by double digits, that is, quite literally, a moment of euphoria. The day Samsung Electronics and SK hynix both hit record highs was close to the kind of moment the saying describes as the time to sell.But Kim and countless other retail investors keep repeating the opposite: "Buying in euphoria and selling in fear. " They hit the buy button at the top, then panic the next day and dump their shares.In behavioral economics, this is a combination of herd mentality and availability bias. The human brain tends to overvalue vivid, recent information.As record highs, all-time highs, and 'emperor stock' headlines pile up day after day, memories of fear fade, and people become more vulnerable to herd behavior.
In particular, a market like the one on the 28th, which plunged more than 3% intraday before rebounding sharply at the end, intensifies retail investors' Loss aversion.In a sharp selloff, fear of cutting losses can push investors to dump stocks.Then, when prices rebound late in the session, the fear of missing out can trigger thoughts like, "Should I get back in now?" In the end, this can erode assets at the wrong time.
Everyone knows the saying "buy in fear and sell in euphoria," but putting it into practice is far from easy.
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bng@fnnews.com Kim Hee-sun Reporter