From euphoria to despair, Korea reckons with stock mania's emotional toll

South Korea's stock market surged in the past two months, reaching a peak on June 19. Since then, the KOSPI benchmark has plummeted by 30%, causing investor trauma that could take years to recover from. President Lee Jae Myung's government has faced political repercussions and the spotlight has been placed on flawed economic practices that led to retail investors engaging in risky leveraged products.

Jeon Suk-jae, a popular YouTuber, reported a shift in his channel's comments, from euphoria to gloom, reflecting the national mood. The surge in popularity of leveraged ETFs, which use derivatives to multiply a stock's daily return, contributed to the market mania. These products, approved despite concerns about investor understanding of the risks, allowed investors to take on debt to chase quick profits.

The situation escalated with the emergence of a man in his 20s suspected of attempted murder over a dispute related to stock losses in Busan. The government has vowed to maintain market stability, but the psychological toll on investors and the need for better understanding of the risks involved are concerns that remain.