The MOEX Tumble and the Forces Behind It

The Moscow Exchange benchmark index fell to 1,900 points on 17 July, matching lows last seen in October 2022, after a punishing 19‑week slide. While the following week brought a modest recovery, most individual stocks remain deep in the red for the year. Only a handful of issuers have bucked the trend, leaving retail investors largely powerless against the large players whose position‑cutting started the rout.

Compounding the pain, high‑profile dividend gaps from major names such as Sberbank and X5 Retail have added technical pressure. With sentiment severely damaged, investors are being warned that impulsive moves could convert paper losses into permanent ones just as the market begins to stabilise.

Why Analysts Say Emotional Moves Will Hurt More Than the Sell‑Off

The Analyst’s Core Warning: Don’t Lock In Losses

Alexander Dudnikov at Cifra Broker argues that the worst response is emotional decision‑making. He stresses that until a position is sold, losses remain on paper and the fundamental quality of assets like Sberbank and X5 has not changed. His central message is “conscious inaction” — allowing the market to find its own floor without crystallising real losses.

Why Margin and Shorting Are Dangerous Now

Dudnikov highlights a less‑obvious risk: leveraged positions. Sharp swings can trigger forced margin calls that instantly turn paper losses real. He also warns against trying to short a falling market, because the situation already looks irrational and snap recoveries can be sharp and unpredictable, only adding risk for anyone betting on further declines.

When to Shed Fear and Start Buying

The report points to history: the 2008 crisis, the COVID‑19 crash and the 2022 sell‑off all proved to be excellent buying opportunities. Back then, prices slumped, news flow was relentlessly negative and no one could see a turnaround. The rule, Dudnikov says, is to buy when fear is pervasive and sell when stocks are once again fashionable. With Sberbank’s forward dividend yield now around 16%, the window of cheap prices may not last once liquidity and sentiment recover.

Specific Steps for Your Portfolio in This Downswing

Based on the analyst’s recommendations, investors can translate the advice into concrete portfolio actions:

  • Avoid impulsive selling. If your holdings are in fundamentally sound stocks such as Sberbank or X5, doing nothing right now keeps losses on paper. Panic‑selling locks in declines that may reverse.
  • Close margin positions immediately. Swinging prices can trigger margin calls and force real losses. Exit any leveraged exposure without delay.
  • Do not short the market. With valuations already looking irrational, a sudden rebound could cause sharp losses; shorting now increases risk instead of protecting capital.
  • Build positions gradually using a “ladder” approach. If you have sufficient liquidity from bonds or money‑market funds, start making measured purchases of strong issuers on dips rather than trying to guess the exact bottom. The aim is to accumulate while fear keeps prices low.
  • Allocate a small portion to safe havens only if needed. If the drawdown exceeds your personal risk tolerance, consider shifting a limited amount into short‑term government bonds or gold, but avoid a wholesale portfolio redesign.