The Russian stock market is going through far from its best times, and the mood of market participants leaves much to be desired. However, calling what is happening chaos or a game without rules means failing to understand the deeper processes at work. I have analyzed the current situation and am ready to share conclusions that explain why panic is not the best advisor, and the market is not a roulette wheel.
The root of the anxieties: geopolitics and inflation
The main factors putting pressure on quotes are obvious. First, there is the extremely tense geopolitical situation, which has not gone away and continues to affect risk appetite. Second, inflationary risks in the economy remain high, prompting investors to reassess their portfolios and seek more defensive assets.
But there are also technical nuances that exacerbate the situation. This refers to the so-called dividend gap, when securities become cheaper after the ex-dividend date by the amount of the payout. This is a natural process that experienced players factor into their calculations. Additional pressure comes from forced closures of positions held by retail investors using leverage. When prices drop sharply, such positions are liquidated automatically, which temporarily intensifies the decline.
Economy vs. casino
There are comparisons of the stock market to a casino, but this is a superficial view. In a casino, everything is decided by chance: the bet, the wheel, the ball. The market, however, follows patterns that are amenable to analysis and calculation. The higher the potential return, the higher the risk—this is an axiom, but it does not make trading a game of chance.
Yes, in recent years we have seen a series of "black swans"—from asset freezes to sanctions shocks that were difficult to predict. But most market events are logical and predictable. Those who closely follow the economy and company reporting are able to forecast how events will unfold and minimize losses during periods of high volatility.
AI will not replace the analyst
A separate topic is the fashion for artificial intelligence in finance. Many fear that algorithms will completely displace humans from the exchange, but these fears are premature. AI will indeed take a prominent place in the financial sector, but the question is whether market participants are ready to fully entrust their money to it.
My experience interacting with AI assistants shows their limitations. They often make mistakes and produce fabricated answers even in simple everyday tasks. About two-thirds of financial organizations already use AI or plan to do so, but the results still have to be double-checked manually. The Central Bank has developed a code of ethics for market participants to ensure the safe use of technology. AI increases productivity through routine operations, but it does not free humans from intellectual work.
My conclusion: the current nervousness is not a sign of collapse, but a signal to reassess strategies. The market is alive; it breathes and corrects itself. For an investor who understands fundamental drivers and does not give in to emotions, such periods offer opportunities, not losses. The key is to remember that discipline and analysis always beat intuition and panic.