"Stock Market Difficulty Exceeds 10," Unprecedented Volatility That Even Experts Couldn't Handle... Focus on Good Investments While Holding Cash

Despite over 30 years of stock market experience, expert Yoo Young-hwa rated the current market's difficulty as far exceeding 10 on a scale of 0 to 10. This signifies that market unpredictability and volatility have reached an extreme. It means an unprecedented situation continues that is difficult to explain with past experience.

In particular, large-cap stocks are plummeting by as much as 50% due to mere supply and demand factors. This decline is faster than during past financial crises, creating an extremely difficult market environment for investors to navigate.

Expert Yoo Young-hwa reported that during this downturn, even so-called stock gurus often expressed helplessness and faced difficulties. She even witnessed investors around her shedding tears, indicating how severely the market's decline was felt.

This highlights that the market's volatility and magnitude of decline exceeded ordinary expectations, causing significant emotional and practical blows even to experienced investors.

Expert Yoo Young-hwa believes there is no inherent 'skill' in the stock market. Instead, she emphasized that the difference between stock gurus and 'stock newbs' (novice investors) lies in their ability to accept a bear market. The profits of so-called gurus might largely be 'accidental,' and what matters is how one responds in a crisis.

The biggest difference between gurus and newbs is their ability to acknowledge and accept a decline when it comes, and then prepare for the next opportunity. Investors must learn from failure and find opportunities to recover from that failure.

Ultimately, stock investing requires continuous study, learning, and a flexible attitude towards market changes, advised expert Yoo Young-hwa. Consistent learning and experience are crucial to understanding the market and establishing one's own principles to effectively deal with unpredictable volatility.

Expert Yoo Young-hwa analyzed that Nvidia's earnings announcement has had a limited impact on AI hardware-related stocks for several quarters now. The market already anticipates Nvidia's performance through related indicators like TSMC's revenue, and expects solid earnings.

Therefore, Nvidia's earnings release is not expected to have a significant ripple effect on the overall AI market. Meanwhile, the core theme of the Jackson Hole meeting is anticipated to be 'payment systems,' which could be linked to short-term bond yields and stablecoins.

Expert Yoo Young-hwa interpreted the official theme of 'payment systems' for the Jackson Hole meeting as potentially stemming from systemic considerations shared by the U.S. Treasury and the Federal Reserve. This analysis connects to the possibility of stablecoins becoming a new source of demand for short-term Treasury bills.

If stablecoins are utilized as a demand source for short-term Treasury bills, it could alleviate the U.S. Treasury's debt issuance burden while supplying new liquidity to the market. Such discussions could have significant ramifications across the financial market.

Wall Street uses the expression 'bonds have an IQ of 2000,' meaning the bond market reflects all subtle changes in the financial market most quickly and sensitively. The movement of bond yields is considered a leading indicator, even more so than exchange rates, guiding the market's direction.

Due to this characteristic of the bond market, fluctuations in bond yields are crucial clues for investors to understand market trends. Even subtle changes in bond yields can contain important signals about future stock market or macroeconomic conditions.

Although concerns exist in the market about a potential interest rate hike at the September FOMC, expert Yoo Young-hwa analyzed that if future CPI (Consumer Price Index) and employment figures turn out better than expected, the likelihood of a rate hike could decrease. If these indicators do not point to a rate hike, it could positively impact the market, with bond yields falling and growth stocks strengthening.

However, given the continued high volatility in long-term yields, concerns about a short-term rate hike may not completely dissipate. Investors need to closely monitor future economic indicators and respond to market movements.

Expert Yoo Young-hwa explained that institutional investors' profit-taking sell-off might increase in September. Institutional managers measure monthly performance, with final annual performance evaluations typically taking place around October.

Therefore, after September, in anticipation of the October evaluation, there might be a move to realize some profits to reduce uncertainty. Additionally, sell-offs aimed at avoiding capital gains tax for major shareholders before year-end dividends could also emerge, contributing to increased market volatility in September.

In a volatile market, novice investors should focus on investments they are good at, rather than trying to chase every fluctuation, advised expert Yoo Young-hwa. If one lacks confidence in trading and the ability to respond to volatility, it is wise not to intervene in the market excessively. During difficult market periods, taking a temporary break can also be an important investment strategy.

Most importantly, managing risk through investment weight adjustment is crucial. Instead of committing all funds at once, patience is needed to hold some cash and await the next opportunity. Reading market trends and adhering to one's own investment principles is key to long-term successful investing.

Furthermore, 'good investments' means investing in areas or companies that one knows and can analyze well. Rather than chasing stocks recommended by others, one should make investments they can be confident about. This approach helps stabilize investor sentiment and make rational judgments in a highly uncertain market.

In conclusion, in the current market situation, a conservative approach is advisable for novice investors, focusing on areas they can do well in, and if necessary, maintaining a wait-and-see attitude, rather than pursuing aggressive short-term profits.

The construction industry is generally known to be sensitive to economic conditions, but recently, it has gained momentum for growth regardless of the economy, thanks to new drivers like AI and nuclear power infrastructure expansion. In particular, as the power shortage intensifies due to the explosive increase in data centers, nuclear power plant construction is accelerating to address this.

This trend provides new business opportunities for major domestic construction companies such as GS E&C and Hyundai E&C, acting as a strong growth momentum. Essential infrastructure projects like AI and SMRs (Small Modular Reactors) are expected to continue expanding for the next 2-3 years.

Currently, construction stocks might seem expensive if only considering their existing legacy construction performance. However, with strong new growth momentum from data centers and nuclear power plants, their valuation is difficult to assess.

Since it's challenging to accurately translate the value of this new momentum into current figures, investors should not be fixated solely on existing performance indicators but rather focus on future industrial changes and growth potential. One could say we've entered a stage where investment is based on momentum rather than valuation.

Currently, major construction stocks like GS E&C and Hyundai E&C are driven by institutional investors. This implies the need for a different approach compared to individual investors.

Expert Yoo Young-hwa advised approaching construction stock investments from a trading perspective. Since profits are not yet visibly materializing, the initial stage of building an investment idea might be strongly thematic in nature. Therefore, a cautious approach is necessary if one lacks conviction.

The United States is lacking in large nuclear power plant construction capabilities and has an inadequate equipment value chain, leading it to seek assistance from South Korea. In particular, the move by U.S. Westinghouse to acquire a stake in a specific Korean company suggests such cooperation is possible. This situation could offer domestic construction companies opportunities to enter the U.S. nuclear power market.

Momentum for large nuclear power plant orders is becoming visible, and simultaneously, IPO schedules for domestic nuclear power-related companies are aligning, raising expectations for the related industry. As U.S. nuclear power construction projects gain traction, the role of Korean companies is expected to become even more crucial.

This could be an opportunity for the Korean construction industry to enter the U.S. market in various forms, beyond simple construction, including equipment supply and technological cooperation. With government support and active corporate investment and technological development, Korea could secure an important position in the global nuclear power market.

Expert Yoo Young-hwa stated that personally, investment in construction stocks is preferable. The cosmetics industry, as a consumer good, is highly vulnerable to trend changes and has seen a short-term surge, leading to a relative lack of confidence in its performance. She pointed out that with rapidly changing trends, it's difficult to respond without strong conviction.

Conversely, the construction and nuclear power industries are expected to see an acceleration of essential infrastructure projects over the next 2-3 years, providing sustained growth momentum. This allows for expectations of stable growth from a long-term perspective, rather than being sensitive to trends like consumer goods.

Therefore, expert Yoo Young-hwa emphasized that construction stocks, which are expected to grow steadily by riding long-term megatrends like AI and nuclear power infrastructure construction, are more attractive investment options than investments relying on short-term trends like cosmetics.

In conclusion, while cosmetics as a consumer good face high volatility due to rapidly changing trends and short-term surges, construction and nuclear power have sustained growth momentum based on long-term infrastructure demand, placing them at an advantage in terms of investment stability and attractiveness.