[W Forum] To Protect the Unchanging Truth

'How does love change?'

Depending on the era you grew up in, you might be puzzled and wonder what this sudden question is about, but those who watched the hit movie from the early 2000s will surely remember this famous line. In response, the question "How does love not change?" also seemed to be quite popular. The feelings of lovers who once felt love have turned into a situation where even being close to each other becomes difficult.

Situations that occur in someone's romantic relationship actually appear here and there in the lives we live. Not only is the truth we believed to be absolutely right sometimes not true, but it can also lead to the conclusion that it was a wrong judgment. The faith that seemed eternal shatters into pieces. Is the changed 'past truth' suddenly showing me a terrible side? No. Perhaps it is that I projected my belief onto the other person, avoiding seeing their true self, and eventually received a breakup notice.

In the investment field as well, there are people who stubbornly believe their past knowledge as an 'unchanging truth' and suffer in silence when betrayed. For example, some still say that stocks are close to speculative investment and bonds are always a safer investment.

In today's hyperinflation situation, long-term low volatility hardly works as an advantage for bond investment. When inflation causes long-term interest rates to rise, bond prices, which move in the opposite direction to interest rates, fall. Think about the time when bonds are redeemed in cash. Due to the decline in currency value, you would receive less than expected, increasing your loss.

In fact, according to a comparison of the US 10-year Treasury bond yields and stock market returns from 1926 to 2009, three consecutive years of negative returns occurred more frequently in the bond market than in stocks. Low volatility does not necessarily equate to safety. Rather, 'how well you understand' is closely related to safety. Even if short-term volatility is higher than bonds, if you have studied a particular company in depth and bought and held its stock, you could have achieved superior returns.

There is another example. Some people with little investment experience, after understanding the mid- to long-term upward trend of the stock market, decide to try the 'index tracking' method. A representative example is investing in Exchange-Traded Funds (ETFs). This method is chosen to reduce vague fears about volatility while capturing stock investment returns. Investing in ETFs might be wiser than losing money on individual stocks or earning lower returns than the market, but it is not as easy as it seems. Since you can achieve higher returns by deeply understanding and directly investing in a few stocks, I personally would not maintain ETF investments for a long time. According to surveys by overseas financial information firms, very few ordinary investors maintain ETF investments over the mid- to long-term. Therefore, I continue to recommend individual stock investments even to those who believe 'ETF investing is the smartest.'

The truths we believe will never change can change at any time. To find the truth in constantly changing situations, we must continuously observe and study the changes in others. Virtual assets, the metaverse, and non-fungible tokens (NFTs), once considered interests only for young people, are rapidly penetrating the businesses of countries and companies. I have also started to sense changes in the financial market and make efforts to learn with an open mind. To protect the truths I believe in, I must continuously strive to understand changes, and that effort should extend to our daily lives, workplaces, and those around us.

This content was produced with the assistance of AI translation services.