Korean Retail Investors Snap Up $4.9B in US Stocks Amid Market Correction

Korean retail investors bought approximately 7 trillion won worth of US stocks over the past month despite global markets entering a correction phase. Even after the S&P 500 index began its significant decline, these investors aggressively pursued bargain hunting, loading up on growth stocks in artificial intelligence, quantum computing, and cryptocurrency sectors.

According to data from Korea Securities Depository, Korean retail investors net purchased $4.87 billion (approximately 7.19 trillion won) in US stocks during the one-month period from November 13 to December 12, when the S&P 500 began its notable decline. While this falls short of the $7.68 billion (approximately 11.35 trillion won) in net purchases during the preceding month from October 13 to November 12 when markets were rallying, analysts consider this aggressive buying given the duration and depth of the correction.

Notably, retail investor funds concentrated on growth stocks rather than companies with proven earnings track records. During this period, Alphabet topped the net purchase list at $1.42 billion (approximately 2.1 trillion won), followed by Nvidia at $377.45 million (approximately 557.7 billion won), IonQ at $221.14 million (approximately 326.7 billion won), and Bitmine at $219.45 million (approximately 324.2 billion won). The purchases reflect a balanced approach to this year's second-half themes, spanning from major big tech to quantum computing and Bitcoin-related stocks.

Securities analysts note that liquidity conditions are gradually improving as the US Federal Reserve has begun cutting interest rates and started purchasing short-term Treasury bonds. While short-term volatility remains unavoidable, they explain there is significant room for a liquidity rally to resume over the medium to long term. Global investment bank Goldman Sachs forecast that the S&P 500 could reach 7,600 next year.

"Despite the AI overinvestment controversy, Oracle's stock plunged after reporting third-quarter results that fell short of expectations, but its order backlog continues to show record growth," said Seo Jung-hoon, a researcher at Samsung Securities. "Since large-scale capital expenditures are likely to eventually convert into profits, the current phase is akin to a 'lean period' before harvest."