My 3,000 P stocks crashed, what should I do?

Fear Index Hits Highest Since June Last Year
Instead, "Two Steps Back for One Step Forward"
Samsung: "Mainstream Trend Still Positive"

On the 29th, a dealer is closely watching the monitor in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Junho Hwang] On the 29th, the KOSPI fell below 3000, increasing anxiety among individual investors. There is concern that the real downhill path might begin next week. The KOSPI 200 Volatility Index (VKOSPI), which reflects investors' psychological anxiety, also hit its highest level (35.73) since June 18 of last year. However, securities firms emphasized that "the KOSPI adjustment is a temporary phenomenon" and that this is a timing to take a breather.

Instead, "One step back for two steps forward"

VKOSPI showed its highest level since June 18 of last year.

Daishin Securities judged the adjustment on the 29th as "one step back for two steps forward." The basis is economic indicators. The IMF projected GDP growth rates of 3.5% and +5.5% for last year and this year, respectively. These are increases of 0.9 percentage points and 0.3 percentage points compared to the October 2020 forecast. This figure raises the possibility of recovery beyond economic normalization this year. In particular, the recovery momentum is expected to strengthen from the second quarter. Additional economic stimulus measures from major countries such as the US and Japan are also positive factors.

Operating profit forecasts for Korean companies are also positive, and the KOSPI’s forward PER compared to global markets is slightly above 70%, which can be seen as undervalued. Lee Kyung-min, a researcher at Daishin Securities, stated, "The short-term volatility expansion of the KOSPI is judged as an opportunity to increase weighting," adding, "The KOSPI 3000 era has just begun. There is still a long way to go."

Samsung: "The trend remains positive"

Samsung Securities viewed this market adjustment as an extension of short-term profit-taking. One characteristic of individual investors who led the KOSPI 3000 is their strong caution against overheating, and they reacted sensitively to the US stock market and others.

The underlying trend is still evaluated as positive. The mainstream of the market is believed to trust the fundamentals of the stock market, including expectations for economic activity normalization due to vaccine distribution, a low-interest-rate environment likely to persist for a long time, and the explosion of deferred demand caused by COVID-19.

Seo Jeong-hoon, a researcher at Samsung Securities, analyzed, "The possibility that a minor phenomenon will reverse the direction of the economy itself is extremely low," adding, "Rather, there is a considerable advantage in that the importance of appropriate stock valuation has been reawakened due to this unusual event."

This content was produced with the assistance of AI translation services.