[EDITORIALS]What goes up will fall

The bull is rampaging in the domestic stock market. The Korea Composite Stock Price Index is near the 750-point mark, gaining about 15 percent over the last five trading days. Although it is extremely difficult to predict how stocks will perform, everybody seems to expect that the equity markets are in for another big jump.

The rebound in global semiconductor prices triggered the recent rally. Prices for dynamic random access memory chips, which are the flagship products of Korean chipmakers, rocketed 40 percent during the last 10 days or so. Adding fuel to the bull run is the projection of an earlier-than-expected recovery of the U.S. economy.

Various factors can boost share prices further. The problem is that expectations often exceed reality. In fact, there is some potentially bad news that could put a damper on this year's economic recovery: The Japanese yen has been weakening since late last year; crude oil prices are unstable as the result of a production cut by the Organization of Petroleum Exporting Countries. In addition, key restructuring issues involving Daewoo Motor Co. and Hynix Semiconductor Inc. are not yet resolved. If politicians dole out pork-barrel projects to gain voters' support in this year's regional and presidential elections and succumb to demands from interest groups, national politics and the economy would be damaged.

Past experiences tell us that an unending rise in share prices is unthinkable. If careful management is not applied to the stock market, which is led by foreign and local institutional investors, individual investors will likely lose their shirts. If individuals take a plunge into stocks to make a killing in a short period of time, the stock market might become a "killing field" for an army of individual investors.

The equity market must be kept sound to pave the way for direct financing, revive investments in companies and accelerate financial reforms. Considering that the Korean stock market is one of the least sound markets, the government must clamp down on unfair practices, such as stock-price rigging and insider trading and make the market more transparent. We advise individual investors to engage in discreet risk management, making medium to long-term investments, rather than seeking quick profits.