Recently, the stock market has been changing its complexion day by day. Seeing market-leading stocks plunge in a single day, the saying that 'this is a market where it is difficult to be certain of anything' rings true.

AI and Semiconductor Leaders Also Weaken... Profit-Taking Selloff Pours In

Even the AI and semiconductor sectors, which have driven the market, have recently been unable to avoid weakness. While they rebounded in today's session, profit-taking selloffs poured in centered on stocks that had surged rapidly on the back of future growth prospects, revealing concerns over elevated corporate valuations. It is true that market expectations have grown even higher regarding how quickly AI companies' performance will translate into actual profits.

Geopolitical Risks + Interest Rates and Exchange Rates... Multiple Negative Factors at Play

On top of this, geopolitical risks that have resurfaced are further freezing investor sentiment. As tensions between the United States and Iran in the Middle East have escalated once again, volatility in international oil and commodity prices has expanded. However, this does not mean that the preference for safe-haven assets, which had shown strength during past geopolitical anxieties, has strengthened.

Amid a market environment that is difficult to predict, with overlapping concerns about interest rates, exchange rates, and a global economic slowdown, the stock market has entered a phase where multiple negative factors are exerting influence simultaneously rather than a single variable.

Industrial Growth ≠ Stock Price Direction

The growth potential of the AI industry has not disappeared. Semiconductors also possess long-term growth drivers, such as data centers, high-performance computing, and advanced packaging. However, industrial growth and stock price direction do not always walk the same path.

As expectations have driven up stock prices first, the market is now examining performance, profitability, and valuation more coldly than technological prowess. In times like these, rather than overreaching to find certainty, investors need an attitude that acknowledges uncertainty.

Four Principles Investors Should Have

First, distinguish between industrial growth and stock price movements. Just because the AI market is expanding does not mean all AI-related stocks will rise. A forecast for a semiconductor industry recovery alone does not improve individual companies' earnings. The criteria for investment decisions should be based on a mid- to long-term perspective, not mere expectations.

Second, beware of over-trusting a specific sector or theme. The fact that AI and semiconductors are long-term growth industries remains unchanged, but during that process, corrections larger than expected can occur at any time.

Third, diversified investment and cash holdings are essential. Diversified investment is not a strategy of giving up returns, but rather a minimal defensive mechanism to protect assets when predictions go awry. Rather than investing all funds in the market, leaving room to wait for opportunities becomes a competitive advantage in a highly volatile market.

Fourth, avoid emotional responses. It is strictly prohibited to chase-buy based on a single news story or sell out of fear. Geopolitical risks can ease at any time or persist longer than expected. The AI industry can also return to a growth trajectory after a short-term correction.

Rather than trying to predict each of these variables, it is important for investors to establish their own investment principles that will remain unshaken in any situation. The current stock market is one where it is difficult to easily be certain about any stock or sector. This is because complex variables—AI and semiconductors, geopolitical risks, and interest rates and exchange rates—are all shaking the market.