One-Third of the Wealthy Increased Their Assets by Over 10% During the Pandemic

Actively Increasing Stock Proportion Among Assets... Approaching Deposits
Real Estate Is the Largest Source of Asset Growth
"Will Continue Holding Stocks Even If They Rise" 43%

[Asia Economy Reporter Minwoo Lee] About one-third of wealthy individuals with financial assets exceeding 1 billion KRW experienced an increase of more than 10% in their asset size during the two-year COVID-19 pandemic period.

According to the '2022 Korean Wealth Report' published by Hana Financial Management Research Institute based on a survey analyzing the financial behaviors of wealthy Koreans on the 13th, 29% of wealthy individuals saw their assets grow by more than 10% during the 2020-2021 pandemic period. The proportion of people whose assets increased by more than 10% significantly exceeded that of the mass affluent (financial assets between 100 million KRW and less than 1 billion KRW) at 22%, as well as the general public (financial assets less than 100 million KRW) at 12%.

During the first pandemic, wealthy individuals slightly increased their cash and deposit ratios due to uncertainty (41%→43%) and also raised their stock holdings (16%→20%). In the following year, although adjustments in the composition of financial assets were relatively small, the proportion of stock holdings continued to rise to 27% due to a sharp increase in stock prices, approaching the long-standing highest proportion in wealthy portfolios held by deposits (28%).

In particular, wealthy individuals who actively changed their asset composition ratios showed better asset growth performance compared to those who did not. Among wealthy individuals who did not change their asset composition, 22% achieved high returns with asset growth exceeding 10%. In contrast, 31% of those who adjusted their asset composition achieved returns exceeding 10%. This indicates that those who actively responded to changes achieved positive results.

The asset that had the greatest impact on the wealth accumulation of high-return wealthy individuals was real estate. More than half, 57%, cited real estate as their top choice, followed by direct stock investment (16%).

Meanwhile, wealthy individuals were found to be less likely to sell stocks compared to the general public. They especially tended to hold onto stocks longer when prices rose. According to the report, wealthy individuals realized profits when their held stocks rose by an average of 23% and cut losses when stocks fell by 15%. In contrast, the general public sold stocks when prices rose by 15% and cut losses at a 15% decline.

Moreover, 43% of wealthy individuals responded that they hold onto stocks even when prices rise, which is 1.7 times higher than the general public's 25%. A similar trend was observed in responses about enduring stock price declines. Among wealthy individuals, 44% continued to hold stocks despite price drops, whereas only 38% of the general public did so. This indicates a tendency among wealthy individuals to avoid selling stocks easily in response to price fluctuations compared to the general public.

Regarding future stock market outlooks, wealthy individuals generally held a negative view. The proportion expecting a declining market, including gradual decline (26%) and rapid decline (4%), reached 30%, while the mass affluent and general public expected declines at rates of 19% and 21%, respectively. Given their pessimistic economic outlook, more than half of wealthy individuals planned to maintain their current asset composition for the time being. Those intending to reduce real estate holdings and increase financial assets accounted for 19%, and 15% responded that they would maintain their asset composition but change their investment content.

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