Surprisingly, we can invest in some stock markets whatever you want with your currency. In Korea, not just only the U.S stock market, we also have a chance to invest in an Emerging market like Vietnam and Indonesia. While most personal investors are skeptical about the growth potential of the Korean stock market, the popularity of investing in the foreign market is getting bigger.
why do they become severer skeptic their market?
Look at the below graph.
The graph shows us the variation in the stock market for over 10 years. October 15th, 2010, it was 1902 point which is higher than that of March 2020(1672 point). It means that if you invest in the Korean stock market in 2010, your rate of return to investment is O(zero) percent. If it includes the inflation rate and the value of time, it should be minus returns.
Compare to other markets, you might feel that how Korean is weaker than others.
Nikkei 225, The Japanese stock market, it was terrible compare to other markets from 1980 to early 2010(the lost decades), but after 2010 it has been growing about 70%, from 11,507 to 17,011 point. (Recently, it is getting lower than before due to the situation of coronavirus)
It is not that dramatic growing but at least better than the Korean market.
How about the U.S stock market?
It has been growing smoothly overall years from starting. In other words, one of the most concrete markets is U.S stock since 2010. From 2010(826points) to 2020(2386 points) about 300% growing which is better than other markets.
from now on, you might think that "so, do I have to invest in the U.S stock market instead of the Korean market? then why the title is "why is the Korean stock market still attractive?"
(the answer is below)
if we compare only markets to markets, the U.S market is the best. But if you look at the market with a different perspective, you may have another conclusion.
The PBR of the Kospi market is the lowest number compare to before one. it's about 0.70 which is lower than 1.00
The PER is about 14.23 and also it is getting smaller from the starting day of 2020.
the Average dividend yield of the Kopsi market is 2.57% in March 2020. it is even larger than that of the Nasdaq market which has 1.70% of average dividend yield.
From the other perspective, individual stock from the Kospi market is also attractive. For example, there are Samsung electronics(PER 10, PBR 1.26, Dividend 2.99) which is the average case, and the extreme case is KB Finance(PER 3, PBR 0.3, Dividend 7.4). Due to the recent meltdown weeks from U.S and Europe to the Asian market, the numbers become looks better, but before that crisis, the Korean market was even charming than other markets.
simply, there are only two ways, which are up and down.
(I hope there will be no more horizontal way in the other 10 years...)
I would bet the Kospi will be rising soon. The stock market is one kind of mirror of its economic health condition. Hope that the Korean market will be healthier than now. I cannot expect the short result of the end of the market price in daily, but I can anticipate the better future of the Korean stock market in 10 years.
In conclusion.
1. Korean market is the best?
:Well, not the best but attractive than other emerging markets.
2. Korean company is okay?
: Yes, while the Korean market only got Zero percent returns, the Korean companies have been grown well.
3. The market will be better than now?
: I really hope so :)
It is too cheap to sell the Korean market.
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