Retail investors lost W7.45 tril. in 2018

By Jhoo Dong-chan

A 36-year-old surnamed Yoon who owns two small businesses in Seoul used to be a market believer, investing his entire fortune in stocks instead of savings earlier this year.

"Bank savings give you a maximum 4 percent interest rate. I thought it was just too boring. So I decided to buy big-name stocks such as Samsung Electronics and SK hynix," he said.

"I understand these two firms post record-high earnings this year, but their performances never reflected in their stock prices. They rather plunged to the bottom. I lost too much money. Now I can't even sell my stocks at a loss."

The nation's private investors, like Yoon, sustained a great deal of losses again this year. They enjoyed a short rally in January, but stocks have since started crashing, until plunging below the 2,000-point level in October.

According to the Korea Exchange (KRX), Sunday, private investors invested a total 7.45 trillion won ($6.66 billion) in the benchmark KOSPI this year. The previous largest purchase figure was in 2007 when private investors bought 6.45 trillion won worth of stocks before the global financial crisis.

However, returns were disappointing.

Of the top 10 popular stocks they bought, six stocks sustained a loss in their prices.

Share prices of Samsung and LG Electronics, this year's most popular stocks among private investors, posts 24.06 percent and 41.23 percent losses in return ratio this year. Other big-name stocks such as Korea Aerospace Industries, LG Display, POSCO and Samsung Life also sustained double-digit losses in their share prices.

By contrast, foreigners dumped 5.72 trillion won worth of stocks this year. It was the largest sellout figure in seven years since they sold 7.99 trillion won worth of stocks in 2010.

Institutional investors also sold 2.88 trillion won worth of stocks in the meantime. Their sellout figure has been larger than purchases for five years in a row.

"It is easier for institutional investors to sell their stocks at loss. They have many options, including short selling. For private investors, things are different," Yoon said.

"It's almost impossible for us to sell at a loss when stock prices are down over 10 percent. Private investors have few options to leave their stocks as they are while praying their prices recover soon. However, it never happens with institutional investors coming in to short them. It's so unfair."

The KRX said the KOSPI was down over 17 percent this year due to the ongoing trade dispute between the U.S. and China. It was the largest drop since the 2008 global financial crisis.

The total market capitalization of listed firms is 1,344 trillion won as of the end of November, down 262 trillion won, or 16.3 percent, from a year earlier.

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