I am practically still a beginner investor, only in my fifth year of investing in stocks, but since I have some time I would like to review how things went.
I have next to no spare funds, so I invest only with money in my IRP and DC accounts, which I cannot withdraw for now.
My target return is 10% a year.
The IRP, which I started first, is meeting the target, but the DC account, which I started later, is falling short as of now.
Both peaked at the end of May and have since given back half of that.
It is a shame, but having experienced nothing but declines back in 2022 when I first started investing, I am taking it in stride.
They should be up before I retire and start drawing my pension.
I do not know much either, so following those around me my portfolio was centered on US index-tracking ETFs.
I thought I was diversifying, but three index trackers, the S&P 500, NASDAQ and Philadelphia Semiconductor, made up more than 60%.
Then when President Lee Jae-myung took office I raised the proportion of KOSPI-tracking ETFs, and I have lowered it somewhat now.
As it happens the exchange rate has also fallen, so it is a good time to buy US index-tracking ETFs.
There were people on this board who wrote about that too. I made up my mind around that time as well, but looking at the results now I have a slight regret that I should have adjusted more boldly and with greater conviction. ㅎㅎ
I do not have much time and I am not the type to actively seek out news, so there may be things I have thought about wrongly, but
I suspect the National Pension Service played a large role in the KOSPI going up to 9000 and then falling to the current level.
The president's campaign pledge of KOSPI 5000 was in January.
At that time Samsung Electronics and Hynix were already posting good earnings so prices were rising,
and although I do not know exactly when it began, in hindsight the National Pension Service's equity weighting had grown substantially,
and if it had rebalanced by the rules instead of raising the weighting, I do not think the sharp run to 9000 would have happened.
Of course, even with rebalancing there would have been a high chance of a peak and a downturn by now, but the drop would not have been this steep.
I think the National Pension Service's large increase in equity weighting probably came from opinions outside rather than inside the fund. Under Yoon Suk-yeol too the National Pension Service was mobilized when the exchange rate rose because of the Korea-US interest rate gap, and given that the fund has its own inherent mission, raising the equity weighting far above the previous level amounts to propping up share prices in plain sight.
From the government's point of view the intent was presumably to redirect money flowing into real estate toward the stock market and create a virtuous cycle, but at this point only negative results remain.
Personally I do not think much of real estate investment for asset-building purposes, apart from a single home to live in, but as it turns out it seems to have planted in existing property investors the perception that 'real estate really is the best'.
There are also disappointing aspects to this tax reform bill, and I hope the government navigates it well.
