Following a prolonged period of convalescence that necessitated a hiatus from the markets since February this year, I resumed active investment on Nov 5. During the final quarter of the year, my tactical focus was concentrated on a concentrated portfolio—comprising semiconductor and electronics components in a 75:25 ratio—while capitalizing on the transient volatility of the NFT-driven rally in the gaming sector. From Sep to Dec, I spent much of the period polishing a draft on retail investing, which will be published soon.
Reflecting on the preceding year, the most salient lesson was the primacy of managing “human and health risks.” The tuition paid to realize this was substantial, yet it underscores a fundamental axiom of sustainable investing: systemic risks are often eclipsed by the idiosyncratic vulnerabilities investors themselves carry.
My portfolio with cumulative returns of +21.32%, outperforming KOSPI by +20.51% and KOSDAQ by +18.65% (2021.11.01. ~ 2021.12.31.)
Stock Market: The Exhaustion of the “Corona Premium”
As previously discussed—and omitted from the final chapter of my earlier publication to maintain a focused narrative—the liquidity-driven post-pandemic equity rally was likely to peak by mid-2021 or, at the latest, in the first quarter of 2022. While the indices have recently dropped by several hundred points from their peaks where exorbitant P/E ratios were commonplace, this short-term correction does not signal the end of the broader downturn. Rather, it marks a structural inflection point where the overarching upward trend has fractured.
For 2022, while I anticipate crashes in both the Korean and U.S. stock markets, I expect a decoupling where the South Korean market may exhibit relative resilience compared to its U.S. counterparts (i.e., NASDAQ). However, the era of “beta-driven” gains—where indiscriminate buying yielded uniform returns—has concluded in both markets. The prevailing regime will necessitate a rigorous bottom-up selection, favoring specific equities that possess independent growth catalysts over general index exposure. Unless an investor possesses the analytical capacity to identify these outliers, a defensive posture—combining index exposure with government bonds while maintaining a significant cash reserve—remains the only prudent course of action.
Real Estate Market: Cyclical Inflection and Asset Polarization
The domestic real estate market appears to be approaching a major cyclical pivot. While political catalysts such as the 2022 presidential election may provide a temporary floor, a broader correction is likely to manifest by the first half of 2023.
Nevertheless, the principle of “prime asset resilience” remains inviolable. Markets such as Gangnam typically exhibit an asymmetric recovery profile: they are the first to ascend in a bull market and the last to succumb during a contraction. Consequently, I anticipate a deceleration in general price growth, accompanied by a deepening polarization between prime locations and the broader market.