WSJ Tech News Briefing · Friday, August 28, 2026
The volatility of the South Korean stock market, heavily influenced by a few large companies like Samsung and SK Hynix, serves as a cautionary tale for AI investors. The market's large-cap concentration means buying a country's index is akin to betting on a small number of firms, highlighting the importance of broad diversification.
“What's happening Korea is that the largest companies are such a large component of their stock index that if you're just buying the Korean country index, it's really like you're making a bet on just a small handful of companies and you're exposed to that same volatility.”
“A big thing with stock investing, people have preached for a long time, is diversification.”
“If you're buying the entire market and all these different companies, generally in the US, you've been fairly protected against massive swings. You're diversified across different industries, different businesses.”