‘My life’s screwed’: Korean investors stress out after AI bubble bursts

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFinancial TimesInvestor'My life's screwed': Korean investors stress out after AI bubble burstsMillions suffer 'unprecedented' losses after Samsung and SK Hynix stock tumblesAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.Analysts expect the Kospi's recovery to be slow, with extreme volatility discouraging institutions from taking large positions, while retail investors remain traumatized by recent losses. Photo by Jung Yeon-je/AFP via Getty ImagesSong Mi-kyung pocketed a profit of about Won300 million (US$200,000) earlier this year as South Korea’s stock market surged on the AI boom.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe 60-year-old Seoul resident has now found out the hard way that stocks can go down as well as up after a wild week on the Kospi. Her portfolio now shows a paper loss of more than 60 per cent as the index heads for a record monthly slide.The index is now down nearly 40 per cent from its June peak, wiping about US$2 trillion off its value.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try again“The losses are ballooning day by day. I am really stressed out. I don’t know what to do about it,” she said. “I’ve never seen such rapid falls, not even during the Asian financial crisis. I’m about to give back all the gains I’ve made this year.”Song is among tens of millions of South Korean retail investors caught in this week’s tech sell-off after piling into one of the world’s best performing stock markets to cash in on booming global demand for memory chips.After a blistering rally this year led by Samsung Electronics and SK Hynix, which account for nearly half the Kospi, the index shed just over 17 per cent in three days to its lowest level since early April following a savage sell-off for both companies. Nevertheless, Samsung and SK are still up about 60 per cent and 95 per cent respectively this year.Retail investors became the Korean market’s biggest buyers this year after missing out on a 75 per cent rally in 2025. Many used margin loans and leveraged exchange traded funds to increase exposure to technology shares.The brokerage Korea Investment & Securities said on Wednesday that nearly half of its 880,000 clients who bought Samsung shares were now sitting on losses, while nearly 70 per cent of its 408,000 investors in SK Hynix were also in the red.The number of active individual stock trading accounts in Korea has neared 110 million — the equivalent of about two for every citizen.“The unwinding of leveraged ETFs tracking the volatile semiconductor sector is sending shockwaves through the market, with many retail investors seeing their principal nearly wiped out,” said Namuh Rhee, chair of the Korean Corporate Governance Forum, an advocacy group for small shareholder rights.“The market seems to be nearing a selling climax, with retail deleveraging almost complete and widespread forced liquidation of stock holdings.”Deposits held at retail brokerages, reserved for stock purchases, have fallen to Won107 trillion (US$74 billion), down from a June peak of Won139.7 trillion, according to the Korea Financial Investment Association.Margin debt, which hit a record Won38.6 trillion (US$27 billion) last month as investors borrowed to amplify bets, has dropped to Won33.2 trillion after a wave of forced liquidations during the recent rout.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Part of the problem was regulators’ decision in late May to approve 16 single-stock leveraged ETFs tracking Samsung and SK Hynix, which have been blamed for amplifying moves in indices and individual stocks. Most of these products have fallen more than 60 per cent since their debut.“The leveraged funds became a trigger when the market was already due for profit-taking,” said Jongmin Shim, an equity analyst at CLSA.Following an emergency meeting on Wednesday night, Korea’s finance ministry said it would limit access to leveraged ETFs. The finance minister, central bank chief and financial regulators said in a statement that investment in the funds had been “amplifying market volatility”.Meanwhile, the Bank of Korea has also warned of rising risks from household debt, while lawmaker Ahn Cheol-soo submitted a bill to exempt lossmaking retail investors from stock transaction taxes.Many people had rushed into equities as the Kospi more than doubled this year, putting it on track to become the world’s best-performing major index for a second year. President Lee Jae Myung had encouraged the shift as part of efforts to steer household wealth away from the overheated property market.“The market was doing so well until recently, drawing many amateur investors into stocks this year,” said Ha Seok-keun, chief investment officer at Eugene Asset Management. “That’s why the damage is greater for retail investors.”Brokerage chat rooms have filled with retail investors lamenting losses of 70 to 80 per cent from ETFs. “When can I get out of this hell?” asked one investor in Tiger SK Hynix Leverage ETF after his holding sank by 65 per cent. “My life’s screwed. I don’t think there’s any way out,” wrote another.Young Koreans who embraced the high-risk products have been hit especially hard as home ownership has become out of reach for many young Koreans.“Leveraged ETFs came to be seen as a quick, easy way for them to make money,” said Ha.Shim said retail investors were suffering “unprecedented” losses because many entered the market after stocks had already risen sharply.“The market is headed into its worst phase, where fundamentals no longer matter. It seems to have lost its price-discovery mechanism,” he said. “The vicious cycle is likely to continue for the time being as institutional investors avoid volatility and retail investors pull money out in fear.”Analysts expect any recovery to be slow, with extreme volatility discouraging institutions from taking large positions, while retail investors remain traumatized by recent losses.“In just over a month, their fortunes have reversed rapidly. Many are fleeing the market, frightened by huge losses and exhausted by volatility,” said Ha. “The rapid and deep correction is damaging their mental health as well as their stock accounts.”After initially rising on Thursday, the Kospi reversed course to close 1.2 per cent lower. Samsung Electronics ended just 0.7 per cent higher despite posting record results for the second quarter, reflecting the extraordinary profitability of its AI-driven semiconductor division.Revenue jumped 130 per cent to Won171 trillion (US$119 billion) compared with the same period last year, while operating profit surged about 1,800 per cent to Won89.5 trillion (US$62 billion), in line with expectations.In yet more pain for South Korea’s “ant” investors, SK Hynix fell more than five per cent on Thursday, bringing the slide over the past three days to about 27 per cent.Additional reporting by Daniel Tudor in Seoul© 2026 The Financial Times LtdWe apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.