[PB Notebook] Now Is the Time to Pay Attention to the Dollar

Still a Highly Useful Safe Asset
Most of the Top 3% Wealth Holders Must Own Dollar Assets

Haksu Kim, Team Leader of Hana Bank Apgujeong PB Center

Recently, due to the sharp rise in the won-dollar exchange rate, customers holding dollars have naturally been realizing foreign exchange gains. Profits range from as little as 10% to as much as 30%. Considering that foreign exchange gains are tax-exempt, the effect shines even more. However, when banks actually ask customers, "How much of your assets are held in dollars?" most often the answer is "I’m not sure," or "I don’t have any." This may be because dollars are rarely used domestically, or because people don’t feel the need to hold dollars as an investment asset.

However, in times of crisis, the dollar is ultimately the only asset that shines. Gold could be an alternative asset, but seeing the recent decline in gold prices, it’s clear that the dollar remains dominant. As the world’s primary reserve currency, it consistently holds the top position and is therefore the most preferred safe-haven asset. One might consider investing in the recently depreciated yen or euro, but there are hardly any investable products in these currencies available domestically. On the other hand, holding dollars allows investment in a wide range of products almost as many as those available in won, including time deposits, bonds, equity-linked securities (ELS), exchange-traded funds (ETF), insurance, funds, and overseas stocks. The reason for this broad product range is that the dollar has become increasingly valuable and the amount held has grown accordingly.

In this situation, if you don’t have any dollars on hand, now is the time to review your portfolio. Among the top 3% of asset holders I have experienced at banks, there was no customer without dollars. They always hold at least 10% of their total assets in dollars, invested in products such as time deposits or bonds. Of course, some keep dollars on hand due to overseas business needs. This, too, has resulted in a very flexible portfolio that has benefited from the recent dollar strength, increasing assets and effectively coping with the weak stock market.

Even if you are not a wealthy investor, what products are easily accessible to young office workers? Recently, Hana Bank launched the Million Dollar Account. The advantage of the Million Dollar Account is that when trading overseas stocks through Hana Securities or Samsung Securities, you can invest directly within the dollar balance in the account without having to transfer dollars to the brokerage. More securities firms will be partnered in the future. In practice, trading overseas stocks is often difficult due to the inconvenience of dollar transfers. Also, if you link a foreign currency payment card to the Million Dollar Account, dollars spent overseas are paid directly from the account, and you can withdraw cash from overseas ATMs without fees, eliminating the need to carry large amounts of cash. Additionally, a 80% preferential exchange rate on dollars is always applied, so simply opening a Million Dollar Account brings many conveniences like these. Starting today, if you try trading small amounts in dollar time deposits or overseas stocks, you will actually feel the pride of holding foreign currency assets.

Having dollars will make you feel more stable than holding won. As borders between countries gradually disappear, considering the ease of payment, the demand and usefulness of dollars will surely increase. It is always advantageous to be an early adopter of any asset. It is not too late even now. Developing the habit of gradually accumulating dollars in your asset portfolio will one day create a strong shield for your portfolio.

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