The Russian stock market is going through tough times, and trading participants' sentiment remains subdued. In a detailed analysis of the situation, I identified the key factors putting pressure on quotes, and also figured out why comparing the exchange to a casino means not understanding its nature.
Why investors are in no hurry to buy
Players' pessimism has solid grounds. The extremely tense geopolitical situation comes to the forefront, continuing to adjust any forecasts. The second significant trigger is the persistent inflationary risks in the economy—they have not gone away and continue to weigh on purchasing power and asset values.
However, macroeconomics alone does not determine the dynamics. Technical factors also play their part. This refers to the classic dividend gap, when shares decline after the ex-dividend date by the amount paid to shareholders. This is a natural process, but it adds volatility.
Separately, it is worth noting the effect of forced liquidation of positions held by retail investors using leverage. When prices fall, such positions can be automatically closed, which temporarily intensifies the decline and creates a snowball effect.
Economic reasons for the depreciation of individual securities should not be overlooked either. The Russian market is effectively closed to foreign investment, forcing companies to increase their debt burden. Some issuers, mainly from the second tier, are already defaulting, unable to service their obligations.
The market is not a roulette wheel
In recent years, a whole series of unlikely risks have materialized on the exchange, giving rise to comparisons with a gambling establishment. However, such an interpretation is fundamentally wrong. "Black swans" have indeed occurred—for example, the blocking of client assets in 2022 and sanctions against financial market participants, which were impossible to calculate in advance. But these are more exceptions than the rule.
Unlike a casino, where chance decides everything, the market follows patterns that are amenable to analysis and calculation. The higher the promised return, the higher the risks for the investor. This is an axiom, not a game. That is why careful monitoring of the economy and business processes allows one to forecast the course of events. Thorough risk assessment is the only way to minimize losses during periods of high volatility.
AI will not replace humans
The fashion for artificial intelligence has reached finance, but talk of completely displacing humans is premature. Once, algorithmic trading already raised similar expectations, yet the exchange never ended up without people. The future certainly belongs to AI, and it will take a prominent place in the financial sector. The question is only whether market participants are ready to fully trust the technology.
My own experience with AI assistants shows their limitations. Models often make mistakes and produce fabricated answers even in simple everyday tasks, so many are still wary of entrusting them with money. About two-thirds of financial organizations already use AI or plan to implement it, but results still have to be double-checked manually. The regulator has developed a code of ethics for market participants, but AI so far only boosts productivity through routine operations, without freeing humans from intellectual labor.
My conclusion: the current correction is not a collapse of the system, but a natural reaction to accumulated risks. Investors should focus on fundamental analysis and diversification, rather than seeking "quick money." The market will survive this cycle, as it has survived previous ones, but only for those who play by the rules, not by luck.