Individual Investors Must Look to Themselves

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Individual Investors Must Look to Themselves

"For Stock Investment, Turn to the Our Experts!"
This is the catch-phrase literally every securities and investment trust firm currently uses. However, the question is whether the experts are really the ones to turn to.

Securities and investment trust companies did not pay any attention to the KOSDAQ market last year, though the market maintained a record breaking boom. From the beginning of this year, however, they shifted the focus from the first market, the Korean Stock Exchange, to the second, the KOSDAQ, following the demands of investors. They have bought and sold KOSDAQ shares on a short-term basis ever since then.

In concurrence with the shift, most analysis reports have suggested investing in 'theme shares,' stocks in specific industries, such as bio-technology, networks, or semi-conductors. However, theme shares have not performed well on the market. For example, the day after one securities firm announced its placement of UMS (United Messaging System) related stocks among its theme shares the price began plummeting. The employee from the firm made the poor excuse, "It is a matter of timing. We needed to show the report to the investment trust companies first because they are big customers. So, for individual investors, it came out too late."

On the other hand, securities firms once generated another new term, 'momentum investment.' 'If your stock is on the ascent, do not sell until it reaches its highest point, and do not buy until the market turns bullish.' This philosophy resulted in notoriously large fluctuations in stock prices, and now institutions are trying to move away from this philosophy for investment. One individual investor cynically said, "The cause of the disease is now trying to heal the patient."

Foreign securities firms and the media also deserve criticism. Foreign securities firms labled some short-term prospects with the false title of long-term prospects. The media then quoted this without any reflection.

"If individual investors, who are dissatisfied with the current market behavior and institutional investors, leave the market, the final losers will be the institutional investors." This quote from an individual investor should be kept in the minds of institutional investors and the media.

by Jung Kyung-min

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