66% of Korean Retail Investors "Hold or Average Down" on Losing Stocks

Only 23.9% cut losses according to predetermined rules
"Education is needed to help investors establish investment principles"

Many individual investors in South Korea were found to hold on to losing stocks rather than sell them. Some chose to buy more shares of stocks that had fallen in value, a practice known as "averaging down," while only a small proportion cut their losses.

Toss Insight, the research institute of Toss Financial Group, released a report on November 12 titled "Analysis of Investment Behavior and Trends Among Individual Investors in South Korea."

KOSPI is displayed on a screen in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul, on the 12th. Yonhap News Agency

In a survey of 1,000 individual investors conducted in July and August 2026 by Professor Lee Jeong-hwan of Hanyang University and Professor Jo Jin-hyeong of Gyeongin National University of Education, the most common response was that they "continue to hold" stocks that had incurred losses, at 42.2%. Another 24.4% said they would buy more shares when prices fell, a practice known as "averaging down." Taken together, the responses indicate that two-thirds of investors hold on to stocks that have lost value. By contrast, 23.9% said they cut their losses according to predetermined rules, while 9.3% said they took no particular action.

Investment performance varied depending on how investors responded. Among those who had lost money on domestic stocks over the past year, the proportion was 26.5% for investors who cut their losses according to predetermined rules, lower than the 41.7% among those who continued to hold and the 32.3% among those who bought more shares.

The gap in returns was also clear. Among investors who earned returns of 30% or more over the past year, the proportion was 19.9% in the group that cut losses, about twice the 10.5% in the group that continued to hold. The proportion holding stocks with losses of 30% or more was 9.7% in the group that cut losses and 24.0% in the group that continued to hold.

Toss Insight said, "This study shows that it is important to examine actual investment behavior rather than age or risk tolerance." It added, "Education and support based on investment behavior are needed to help investors understand their own risk accurately and establish reasonable investment principles."

This content was produced with the assistance of AI translation services.