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The difficulty of predicting the stock market The complexity and uncertainty of the stock market makes it difficult to predict its short-term behavior. A variety of external factors affect the market, and it's very difficult to predict how these factors will change. Because of this, it's important to recognize that short-term predictions are about as likely as the odds in a game of sips. However, despite these difficulties, we can understand some of the characteristics of the stock market and build a long-term investment strategy accordingly. Long-term investing and the market's upward tendency Over the long term, the stock market tends to go up, which is supported by data that shows that the longer the investment horizon, the higher the probability of a positive return. For example, when stock indices are evaluated on a monthly basis, they are up 53.4% of the time, while when evaluated on a 20-year basis, they are up 100% of the time. These facts emphasize the importance o

'Abandonment' in the stock market Have you ever heard of the term "abandonment" in the stock market? It refers to a situation where investors stop investing in stocks due to conflicting sentiment or external factors. These abandonments are very helpful in understanding how the stock market moves. Today, let's take a look at "abandonment" in the stock market and analyze how it happens and how investors' sentiment changes. Duration correction and abandonment A timeframe correction is when a stock price doesn't change much over a long period of time or declines slowly. In this situation, investors gradually get tired and abandon their investments. When investors abandon their investments, the stock market becomes less valued and more attractive. Take the correction from 2000 to 2003 as an example: there were many events during this period, but investors got tired and abandoned their investments one by one. The result was a nearly five-year bull mark

1. Geopolitical Issues in the Middle East and the Rise in Oil Prices Instability in the Middle East is a major factor affecting international oil prices. If we look at cases such as the Arab Spring and the Gulf War, we can see that political instability in the Middle East has caused international oil prices to rise. In particular, during the Arab Spring, oil prices rose from $70 per barrel of WTI in early 2010 to more than $110 per barrel in April 2011. In addition, after the Gulf War, international oil prices continued to show an upward trend. However, over time, the influence of political and military issues in the Middle East on oil prices has gradually decreased. In other words, the relationship between "geopolitical risk" and "oil prices" is weakening. 2. Learning effect: Market reaction based on past experience The current market reaction, which is showing more moderate changes instead of sharp swings in oil prices, can be considered a "learning effect&qu

The stock market is constantly fluctuating, which can be very stressful for investors. However, you can effectively manage this stress by using a few strategies. 1. Change the time frame of your chart Daily volatility in the stock market can be quite high. This is especially true if you're using a daily chart. Seeing the ups and downs throughout the day can make many investors nervous. However, things change when you change the timeframe of your chart to weekly or monthly. Over the long term, the daily volatility of stock prices becomes relatively small. For example, if you look at a chart of the KOSPI over the course of a month, it might seem like there are big swings on each day, but on a monthly chart, the swings are smoothed out. 2. Focus on other activities If you find yourself staring at the stock market all day because you're obsessed with its fluctuations, try focusing on other activities. Take your mind off the stock exchange for a while by diverting your attention to

The stock market is filled with news and issues that change on a daily basis. But this information doesn't always help you invest. In fact, the noise can confuse your judgment and derail your long-term investment strategy. Noise in the stock market and its impact The daily barrage of economic news, data releases, and earnings announcements contribute to the noise in the stock market. For example, economic indicators like the U.S. Consumer Price Index (CPI) and the Federal Open Market Committee (FOMC) can have a big impact on the market right away, but their impact is limited in the long run. However, the moment you listen to the noise, you could lose sight of your original investment strategy. If you let the market's temporary fluctuations stop you from acting on your own plan, you're more likely to end up with big losses. Cut through the noise and walk your own path So how do you get away from all that market noise? The answer is to put on "earplugs," and I'm

Stock Market and Cryptocurrency Bubbles 1. Irrational stock market behavior While the stock market is usually driven by rational investing common sense, exceptions do occur from time to time. This is when the overall market or a specific industry creates irrational stock prices at certain times. However, this phenomenon is not a problem in itself, as stock prices are heavily influenced by emotions as well as rational judgment. 2. Clusters and bubbles: centered around cryptocurrency mania However, what we should be concerned about is when this emotional sentiment turns into herd mentality and creates extreme skewness. This is when bubbles are most likely to occur. The cryptocurrency mania of the winter of 2017 is a great example of this: many people took irrational actions in the name of a "new paradigm." The result was a severe bubble, and many people lost a lot of money. 3. Evidence of herd mentality: Analyzing analysts and reactions to articles We often observe extreme reac

 How are the decisions of the world's largest oil producers, Saudi Arabia and Russia, to cut production affecting international oil prices? Following the announcements by the world's major oil producers to cut supply, international oil prices have been on the rise. The decisions by Saudi Arabia and Russia, in particular, have exceeded market expectations and pushed international oil prices, which were already moving at high levels, to the next level. Changes as oil prices rise Saudi Arabia and Russia's decision to cut oil supply immediately impacted international crude oil prices. The futures price of WTI crude oil rose to $86.69 per barrel, while the futures price of North Sea Brent crude soared to $90.04 per barrel. Production cuts extended for longer than expected Originally, the market expected the Saudi and Russian cuts to be extended for only one month, but in fact, the countries voluntarily extended their supply of petroleum coal for up to three months. Reduced daily

The power of the individual investor: strategies for taking on the big boys Many retail investors feel like they are at a disadvantage compared to institutional and foreign investors. However, the reality is that retail investors have a number of unique advantages. In this article, we'll take a closer look at those advantages. Paycheck to paycheck: the limitations of institutional fund managers First, let's look at the constraints faced by institutional/foreign fund managers. While they typically manage large amounts of assets based on their specialized knowledge and experience, they are also constrained by the fact that they are "salaried". This means that if they don't perform, they lose their jobs. For example, what if someone like Warren Buffett was an ordinary fund manager during the IT bubble of 1999? Even if he approached IT stocks cautiously based on his philosophy, his company's management would demand short-term performance. As a result, Buffett woul