“I Invested 500 Million Won, but Less Than 50 Million Is Left” ... A Salaried Worker’s Confession About Leveraged Investing

[Financial News] A salaried worker has spoken of their distress after investing about 500 million won saved over the course of their career in leveraged U.S. stock products and losing around 450 million won. They reportedly kept investing in other leveraged products in an attempt to recoup their losses, but ultimately lost more than 90% of their principal.
According to Blind, an anonymous online community for office workers, a post titled “I Lost Most of the Money I Saved While Working” was published on the 6th. The writer, identified as A, described their investment losses: “I saved about 500 million won while working, but invested all my assets in leveraged U.S. stock products and lost around 450 million won.”
When A began investing, they expected stock prices to keep rising. Even when their investment fell by about 10%, they held on to the stocks, thinking it was a temporary decline. But A said they realized something was wrong with their investment when losses climbed to 30–40%.
A put off selling, thinking that waiting just a month or so would be enough to recover the principal. Eventually, it became too difficult to bear further losses, and A sold the stocks but did not stop investing. A bought other leveraged products to recover the money they had lost, and the investment kept shrinking as they repeatedly cut their losses and reinvested.
Losses to date amount to more than 90% of the principal invested. Of the roughly 500 million won originally invested, less than 50 million won remains. A said they regretted the investment decisions that resulted in a loss of around 450 million won.
A said that after suffering such substantial losses, even managing normal daily life became difficult. Blaming themself for the failed investment, A said, “I find myself staring blankly for much of the day, and it’s hard to concentrate on work,” and added, “I haven’t been able to eat properly, so I’ve lost more than 10 kg.”
Blind users offered A comfort and encouragement, saying they could start over. Some expressed sympathy for the hardship of losing a lifetime of savings, while other comments criticized reckless attempts to make high returns in a short period and warned about the risks of leveraged products.
Leveraged products track the returns generated by changes in the price of an underlying asset at a set multiple. For example, 2x or 3x leveraged exchange-traded funds (ETFs) are structured to reflect, respectively, two or three times the daily return of an underlying index or stock. A rise in the underlying asset’s price can bring higher returns, but a fall can magnify losses by the same factor.
Investors should also be aware of how leveraged ETFs generate returns when investing over the long term. These products reset their tracking multiple each day based on the underlying asset’s return. As a result, if stock prices repeatedly rise and fall, an ETF’s value may actually decline even if the underlying asset’s price recovers to its original level. This phenomenon is called the “negative compounding effect” or volatility loss.
The Financial Services Commission (FSC) also issued guidance for investors in connection with the introduction of single-stock leveraged and inverse products this past May. At the time, the FSC warned that leveraged products could incur large losses in a short period and that principal could decline even when stock prices move sideways over an extended period.
[email protected] Han Seung-gon Reporter