"Domestic Growth Limits, Need to Look Abroad... #1 in US Investment Rankings"

- Interview with Choi Doo-hee, Head of Global Brokerage (GBK) at Kyobo Securities

Choi Doo-hee, Head of Global Brokerage (GBK) at Kyobo Securities

[Asia Economy Reporter Kum Boryeong] "It is time to look at overseas markets."

Choi Doo-hee, Head of Global Brokerage (GBK) at Kyobo Securities (photo), stated in an interview with Asia Economy on the 8th that more focus should be placed on overseas investments rather than domestic ones.

The idea of buying foreign stocks such as Tesla, Starbucks, Disney, and Apple has become more common. According to the Korea Securities Depository, the settlement amount for foreign currency stocks last year was $40.98 billion (approximately 50 trillion KRW), a 25.8% increase compared to the previous year. Choi explained, "There are many good investment opportunities overseas, which led to these results," adding, "In contrast, the domestic market is suppressed by too many factors such as structural problems of large corporations, geopolitical issues, and diplomatic conflicts with neighboring countries."

The biggest attraction of overseas investment is the rate of return. Even looking only at the U.S., the S&P 500 and Nasdaq indices showed a steady upward trend from 2016 until before the COVID-19 pandemic. Choi said, "There are many growing markets overseas. For example, countries hosting global events experience annual positive factors," and explained, "The KOSPI index did not show significant growth even before the COVID-19 outbreak. The domestic market accounts for about 2% of the global stock market by market capitalization, meaning there are many options to choose from in the remaining 98% of investment destinations."

Among overseas markets, he ranked the U.S. market as the top priority. Choi emphasized, "The U.S. is the most watched market globally and is a rational market where the probability of making profits is high when using various investment techniques such as value investing and technical analysis." He particularly suggested paying attention to IT-related stocks in the U.S. Nasdaq market, as many leading companies driving the global 4th Industrial Revolution are concentrated there. Choi added, "Although the U.S. also showed a stock price correction of over 30% due to COVID-19, indicating a short-term economic downturn, I expect a gradual U-shaped recovery once the pandemic is resolved. It is something to watch closely," but he also cautioned, "However, for now, you should only invest about half of what you originally planned."

For professional investors, he also recommended overseas stock Contracts for Difference (CFD). Choi said, "Using CFDs, you can invest in both overseas and domestic stocks in dollars," and added, "This can help offset some unavoidable structural risks like those experienced during the foreign exchange crisis or the Lehman Brothers collapse."