U.S. Stocks: Regular Investing in the Big Three Indexes Is the Answer

Recently, the market has been driven mainly by semiconductors, showing high volatility. This leads investors, motivated by the urge to recover losses or avoid them, to trade repeatedly. Expert Yoo Yong-ju pointed out that emotion-driven trading is giving way to the need for rule-based investing, saying: "When you ride the market, it rises, then falls the next day, and you feel disappointed. This kind of volatile market keeps repeating. So when it drops sharply you get scared and sell, then when it rebounds you feel regret and jump back in. Going through this cycle again and again..."

Investors try to lock in gains and avoid losses at the same time in a market that swings sharply, but experts say such emotional trading creates a vicious cycle of investing.

This review shows individual investors focusing on short-term market reactions in a way similar to institutional trading. Their trading activity is high, but it is far from the core purpose of investing: building assets.

An analysis of KOSPI trading data for July found that on 9 of 23 trading days investors bought on down days, and on 9 days they sold on up days. Expert Yoo Yong-ju explained: "The thinking is, it went up a bit, so let's sell and recover our principal. Then the next day, oh, it's going up, so they jump back in. This kind of short-term reaction keeps repeating." He said the drive to recover principal is what keeps prompting short-term responses.

Such short-term trading patterns make it hard to fully enjoy the market's long-term growth, and ultimately hurt investors' returns. Focusing only on short-term price moves means missing the gains that come from long-term market trends.

Expert Yoo Yong-ju said: "Looking at data on 200,000 individual investors from 2020, you'll remember individual investors back then. When the market was booming on post-COVID liquidity, the median holding period for individual investors was 3 days."

Back then, individual investors' median holding period was just 3 days, and turnover reached 1,600%. This suggests that today's impatient investing mindset is encouraging short-term trading in much the same way.

The first is the investor whose money is stuck after a sharp drop and has no additional assets, in other words, someone who is 'stuck.' The second is the investor who feels that while the market is rising, their own assets are going nowhere.

The third type is the investor who put off investing and now thinks it's time to get in, but hesitates over whether to invest a lump sum at once or split it up through regular purchases. All three types struggle with market volatility and timing concerns, and regular investing can be a solution for them, he explained.

For investors short on spare cash, he recommended small, regular contributions: "You don't need a lump sum. Just set aside a portion of new income, whether salary or business income, and put it in little by little." If picking stocks is difficult, he advised, "invest in a representative index that holds the whole market."

For investors hesitating over timing, he said: "Try to ease the burden by putting in a set amount every month, and start investing that way." He stressed that splitting purchases over time can reduce psychological stress.

Sumonkey recommended three ETF products for investing in major U.S. indexes: "I recommend three: the TIGER U.S. S&P 500 ETF, the TIGER U.S. Nasdaq ETF, and the TIGER U.S. Dividend Dow Jones ETF." He presented the TIGER U.S. S&P500 ETF, TIGER U.S. Nasdaq100 ETF, and TIGER U.S. Dividend Dow Jones ETF.

"It feels certain that you need the money right now... The reason people don't do it is that they think now isn't the right time to get in." He explained that the feeling that today's spending is certain, or the belief that the current moment isn't the right time to invest, gets in the way of regular investing.

He warned that this mindset leads to losses as investors try to time the market, and suggested they cannot escape short-term temptations.

Sumonkey used S&P 500 data to explain how trying to time the market can cause losses. Assuming $10,000 was invested in the S&P 500 over the 20 years from 2006 to 2025 and left untouched, the value would have reached $8,600. But missing the 10 biggest up days in that period would cut the value to about $3,500, and missing 40 days would drop it to $900, below the original principal.

He emphasized that the largest gains tend to cluster right after sharp declines: "The key point I'm making is that most of these big up days come right after sharp drops."

He concluded that the key is to stay in the market steadily without fearing sell-offs, and warned that trying to time the market can cost investors opportunities and result in losses.

Second, on holding period, he said that "instead of buying and selling quickly, you can focus on long-term asset building and invest for a longer stretch," so you aren't shaken by short-term volatility.

Finally, on returns, he said: "You can pursue upside while aiming to lower the probability of loss when calculating returns." This means that steady, phased purchases help manage the average purchase price, and betting on the market's long-term upward trend can be expected to reduce risk while still pursuing gains.

An analysis of S&P 500 investment data showed that the longer the holding period, the markedly lower the probability of loss. Sumonkey stressed: "The longer you hold the S&P 500 as a long-term investment, the more statistically your returns converge toward 0%."

According to the specific statistics, the probability of loss for holding the S&P 500 for one month was 34%, which fell to 21% for one year and to 8.5% for five years. This suggests that long-term investing is likely to offset market volatility and deliver more stable returns.

Sumonkey pointed to the average holding period of Korean investors, about 3 days, and warned of the risks of short-term investing. He said: "In the statistics for Korean investors, if the holding period is 3 days, meaning you try to win within 3 days and then exit, then, coldly speaking, you are statistically raising your own odds of losing."

He emphasized that trading aimed at short-term price gains statistically raises the probability of losses, meaning investors are increasing their own risk.

The remaining 30% would go into growth themes such as AI, robotics, and semiconductors, seeking excess returns, or alpha, above the market.

This core-innovation strategy aims to use both the market's long-term growth and short-term growth momentum to build assets effectively.

Sumonkey said: "I see the outlook for major U.S. indexes in three stories. The first is whether the AI investment by U.S. hyperscalers will continue." He cited the continuation of big tech's AI infrastructure spending as the first reason.

The second ground is easing concerns about interest rate hikes due to stable inflation indicators, and the third is that elections and geopolitical issues are not big enough stories to change the market's fundamental direction. He expects these factors to combine to support long-term growth in major U.S. indexes.

Noting, "It's called skin in the game, right? You have to actually take part in something yourself before the experience really builds up," he explained that once you start regular investing, you naturally start paying attention to market news and deepen your understanding of investing.

This means investors can strengthen their abilities through practical learning that theory alone cannot provide.

Sumonkey explained: "Five hundred stocks are listed in the S&P 500, and I looked at the proportion of each stock sitting above its 200-day moving average. You've probably seen plenty of charts, so you know what a moving average is."

This indicator tracks the proportion of each of the 500 S&P 500 stocks whose price sits above its 200-day moving average, used to gauge overall market health and whether the uptrend is holding.

Such analysis is a useful reference for identifying the market's psychological resistance and support levels and judging the overall technical strength of the market.