With KOSPI's volatility, how can investors protect themselves?

The South Korean stock market’s recent volatility stems from an AI valuation shock, heavily concentrated in memory chip giants Samsung and SK Hynix. These two companies now account for over 50% of the KOSPI, making the index susceptible to extreme swings exacerbated by leveraged ETFs and reactive retail trading. While the market has seen frequent circuit breaker triggers, the broader South Korean economy remains resilient, supported by strong export performance and growth in sectors like defense and cultural "soft power." Christy Tan, Global Investment Strategist at Franklin Templeton Institute, advises investors to move beyond AI-centric portfolios by prioritizing diversification and disciplined rebalancing. Rather than reacting to short-term market sentiment, maintaining a resilient, multi-sector investment strategy remains the most effective way to navigate the current instability and protect against potential drawdowns.