[Book Sip] The Great Opportunity of Wealth Coming to You, 'The Chance'

Some sentences encapsulate the entire content of the book itself, while others instantly reach the reader’s heart, creating a connection with the book. We introduce such meaningful sentences excerpted from the book. - Editor’s note

This is an investment roadmap by Professor Kim Young-ik, a former ‘jokjipge’ analyst and a master of macroeconomics, introducing how to capture new opportunities for wealth in the era of great investment. Facing another epochal hurdle of a sharp rise in short-term interest rates following a period of low growth and low interest rates, the author painfully recognizes the limits of growth driven by debt and urges readers not to be caught off guard by the times anymore. Based on the latest data and indicators, he details how to identify investment opportunities ahead in the global currency war, excellent survival principles in a low-interest-rate environment, and appropriate asset allocation strategies for households.

One of the most common concerns is the stock price of Samsung Electronics. Samsung Electronics’ stock price reached 95,000 won in early January 2021, and there was even talk of a ‘100,000 won Electronics’. Many people invested in Samsung Electronics, but in 2022, the price fell below 70,000 won. When Samsung Electronics’ stock price kept rising, analysts followed suit by raising Samsung Electronics’ operating profit and target price. Other forecasting institutions did the same. When the economy improves and stock prices rise, forecasting institutions raise their forecasts accordingly, and conversely, when the market turns down, they lower their forecasts accordingly. Recently, the IMF has been lowering its global economic growth forecasts. In its January 2022 forecast, the IMF expected global economic growth of 4.4% for 2022, which is 0.5 percentage points lower than the October 2021 forecast (4.9%). In particular, it sharply lowered the U.S. economic growth forecast from 5.2% to 4.0%, and also revised South Korea’s economic growth forecast down from 3.3% to 3.0%. This is evidence that the economy is weakening. There is a high possibility that the forecast will be lowered further in the April 2022 forecast. It is important to pay close attention to this direction. --- pp. 130-131

I emphasize that dividend investing is a must. You should never buy all at once. If you buy stocks every month as you receive your salary, like a bank savings plan, the dividend yield becomes much higher. For example, KT’s dividend yield is 4-5% annually, and POSCO’s is around 4%. Their PER and PBR (price-to-book ratio) are not high either. Buying such stocks and receiving dividends can yield much higher returns than bank interest. For reference, if the exchange rate falls in the long term, Korean stock prices also rise. Therefore, a falling exchange rate means that our economy is gaining trust and that the current account surplus is increasing significantly. When the exchange rate falls, domestic stocks tend to rise relatively more than export stocks. --- pp. 184-185

The More Chance | Written by Kim Young-ik | 21st Century Books | 232 pages | 18,000 won

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