Some people ask, was this stock correction

Wise market, Stupid investor

Some people ask, was this stock correction predictable? Well, it probably feels like a shock and a scare because there were a lot of people who thought it was only a good thing, but at least it was enough time to respond with a "short-term high" for someone who has faithfully learned past cases..

If you missed minor changes in global liquidity and indicators by focusing on M7, you need to take this opportunity to re-examine your investment habits.

The many strategists who say that if interest rates are cut, the price of apartments in Seoul will continue to rise. I hope this opportunity will correct the distorted investment culture and wrong learning effects prevalent in our market.

When it comes to investing, religious beliefs and beliefs do not necessarily guarantee a good outcome.

So bonds are free from this reality?

So far, bond experts have been proud of their interest rate outlook. If you think you're going to win if you hang in there, your way of thinking is no different from stockholders. There's no asset anywhere in the world where prices always go up, but they just go down.

Without a significant change in the U.S. economy from Goldilocks to recession in the week, it is clear that bond markets now have a serious error in the judgment process of the U.S. economy and monetary policy.

This time, the reversal of short and long-term curves was the longest in history, and no one knows whether the recession, which was said to come in three to six months, will come or not, so I don't know how much of the media headlines about "R's fear" contain the essence..

However, the fact is that after Covid-19, the distorted market has been normalizing, healing itself as follows.

1. While M7, which has served as a defense stock and a safe asset, has entered the adjustment, traditional safe havens such as utilities, essential consumer goods, gold, U.S. bonds, and yen have been in the spotlight for the first time in a long time.

2. The high synchronization of stocks and bonds has been broken. If the two assets are no longer stuck together, the stability and profitability of the portfolio will be restored. At least in the Rule-based model (CTA), the likelihood of systematic risk being the most feared has been significantly lowered.

3. The reliability of VIX, a measure of risk in the stock market, comes to life. In the meantime, the distortion between the price and risk of stocks caused by the explosive growth of derivative-linked (such as covered call) ETFs and short-term options (0DATE) is alleviated. Considering the volatility that is more predictable than the expected rate of return, the utilization of asset allocation and portfolio management increases significantly.

As such, the dramatic rate hikes that followed the Fed's unlimited quantitative easing over the past few years have cost the capital market its normal price discovery function, but it is now trying to restore its original function.

Magnificent 7 is also a key theme representing the spirit of the times, but the inherent volatility and risks of stocks are inevitable. This is the reason of nature, as the mountains are high and the valleys are deep.

I don't think there will be a recession like you're worried about. As the proportion of technology in major industries has increased absolutely, the factors of economic adjustment based on the traditional inventory cycle are not significant. However, there seems to be a possibility of M7 adjustment due to the low growth and high valuation burden.

With this cycle, I'm humbled by the market once again. It's the only truth I've learned in the market over the past 17 years.

Wise market, Stupid investor