IHSG Suspended: Market Overreaction or a Serious Signal?

Today, we witnessed a rare event—the Indonesia Stock Exchange (IHSG) experienced a trading halt after dropping more than 5% in a single session. This marks the first time since the COVID-19 pandemic that the market has been temporarily suspended due to extreme volatility.

Interestingly, while global stock markets showed an upward trend, the IHSG significantly declined. What exactly is happening?

Several factors may have contributed to this downturn:

1️⃣ A recent LPEM UI survey predicting a potential deterioration in Indonesia’s economy.

2️⃣ Rumors of Sri Mulyani’s resignation, which have heightened market uncertainty.

3️⃣ Global financial institutions shifting their IHSG recommendation to "underweight," potentially driving foreign capital outflows.

The immediate consequence? Panic selling. Both retail and institutional investors rushed to exit the market, triggering a sharp decline.

How Should Investors Respond?

✅ Stay calm and adopt a long-term perspective. Market corrections are a natural part of the investment cycle. If the underlying fundamentals of a stock remain strong, there is no reason to panic.

✅ Avoid hindsight bias. Investors often think, "I should have sold earlier," but in reality, market movements are inherently unpredictable.

✅ Prepare for volatility. The stock market is not for the faint-hearted. Price fluctuations of up to 50% are common throughout an investment journey.

Undoubtedly, seeing an all-red portfolio is disheartening. Floating losses can amount to hundreds of millions, if not more. However, as John Maynard Keynes famously said, "In the long run, we are all dead."

So, is this a moment for panic—or an opportunity for accumulation?