Investing your money, in Korea

[anigerla]

Hello,

has anyone invested savings in any Korean bonds/stocks/other alternatives or do majority simply spend all/remit savings back to own country? I was wondering how people deal with savings to protect from inflation or potentially earn some interest on investment?

[배비곳밖]

I only invest in K stock that's traded on the NYSE.

[Daejeon]

Hello,

has anyone invested savings in any Korean bonds/stocks/other alternatives or do majority simply spend all/remit savings back to own country? I was wondering how people deal with savings to protect from inflation or potentially earn some interest on investment?

You really want to know how to protect yourself from inflation via trading bonds and stocks, you should study applied finances, or find an English speaking broker.

I wouldn't invest money only in Korean stocks and bonds, as it is one of the most volatile economies on the planet due to its almost 100% dependency on export.

[Artist Formerly Known as Moderator Jason]

and violatility based upon north korean randomness

[pez]

If you have a lot of savings, the best way to get a HUGE return is to put down a big key money and don't pay rent. If you get housing from your school, then request to change to the stipend and pay for your own place.

That's like getting a $400,000 won/month raise!  You have a to be a little careful of the landlord (check their credit report), but we are going to be living rent AND maintenance   fee FREE for 2 years.  It's amazing!

Other than that, I just do CD's, which get 3.5%-4%, which is better than I would get on anything safe in the US.

If you find out anything, please post it here!  We save a lot here, and are also at a loss at how to invest the money.

[andrucer]

From what I know, foreigners with an E-2 visa are prohibited from buying stocks in Korea. I believe only foreigners with an F-series visa (I think F-2) are allowed to buy stocks.

[matt.teacher1]

I don't invest in the Korean stock markets for a number of reasons-extreme volatility and difficulty to access the markets/customer service/language barrier issues (said in previous comments from others on this thread). However, I do invest in the American stock markets in the USA. Also, there, you have access to a number of ADRs (American Depository Receipts) that track the biggest and best Korean companies like LG, Samsung, Posco Steel, etc. Dealing with an American online broker is really easy from here in Korea. Also, since many of us are paid in Korean won, I suggest learning to watch the Korean won currency vs. the dollar and looking for opportune times to exchange around 1100-1120 range. I am no expert, but from studying the KRW charts it appears that the won is having a lot of difficulty breaking through the 1100 level. Also, compared to other currencies in the world, the Korean won is one of the most volatile and therefore I don't feel comfortable keeping my all of my current savings in the Korean won. Since all of my future earnings this year will be paid in the KRW, I like to minimize my risk by getting mostly back into the US dollar. The world currency markets are an extremely complicated mechanism but if you have the time and inclination, try learning how they work and what moves them and you will be able to time your money transfers at a decent time. One more annoying thing about the Korean won is the potential risk from North Korea rattling the markets.   

[Davey]

Hello,

has anyone invested savings in any Korean bonds/stocks/other alternatives or do majority simply spend all/remit savings back to own country? I was wondering how people deal with savings to protect from inflation or potentially earn some interest on investment?

korean stocks are indeed volatile, but the returns can be quite good. you know, the higher the risk, the higher the potential return generally speaking.

if you just want to keep it simple, i say just invest passively in an index like the S&P 500, which has averaged to yield about 10% a year. this way you just pump money into the index fund without having to actively micromanage it (again, if you want to keep it simple). if that kind of return isn't sufficient, then you need manage your own portfolio, but even then, a lot of people can't beat the index return (yes, even the so-called "experts.")

[anigerla]

What about equivalent of US T-bonds or something similar from Korean government? I'd expect that to be pretty reliable and at least covering the inflation rate. Also, purchasing those and managing should be simpler than stocks. Anyone has experience buying those or foreigners are barred from purchasing? The reason I ask about these is that it seems a simpler and still rather safe option than transferring money to Canada (or any other country + transfer fees) and then purchasing securities there. I do not have a broker back home so I thought it is possible to find one who speaks English here.

[Davey]

What about equivalent of US T-bonds or something similar from Korean government? I'd expect that to be pretty reliable and at least covering the inflation rate. Also, purchasing those and managing should be simpler than stocks. Anyone has experience buying those or foreigners are barred from purchasing? The reason I ask about these is that it seems a simpler and still rather safe option than transferring money to Canada (or any other country + transfer fees) and then purchasing securities there. I do not have a broker back home so I thought it is possible to find one who speaks English here.

here are a couple of threads that i posted in that may help you:

http://waygook.org/index.php/topic,2964.0.html

http://waygook.org/index.php/topic,2241.0.html

you'll probably need a Korean to set everything up.

bear in mind you'll need bonds that cover over the inflation rate since your returns will be taxable (unless there's an exemption for foreigners), so if you only cover the inflation rate (which was quite high last year), you're actually getting a negative return. and since the inflation is high, the central bank may hike interest rates, causing your bond value to fall.

[Daejeon]

From what I know, foreigners with an E-2 visa are prohibited from buying stocks in Korea. I believe only foreigners with an F-series visa (I think F-2) are allowed to buy stocks.

Once you hold 50,000,000 KRW in a KEB bank account you are eligible for a D-8 investor visa which you are I believe you are allowed to work on.

Beating the index is a shot in the dark.  Professionals have the same chance as a monkey throwing darts at the daily listings

Why would you want to buy US treasury bonds, are you out of your mind?

[Davey]

From what I know, foreigners with an E-2 visa are prohibited from buying stocks in Korea. I believe only foreigners with an F-series visa (I think F-2) are allowed to buy stocks.

Once you hold 50,000,000 KRW in a KEB bank account you are eligible for a D-8 investor visa which you are I believe you are allowed to work on.

Beating the index is a shot in the dark.  Professionals have the same chance as a monkey throwing darts at the daily listings

Why would you want to buy US treasury bonds, are you out of your mind?

indeed. and daejeon didn't make up that analogy out of thin air--it has actually been documented.

[Daejeon]

From what I know, foreigners with an E-2 visa are prohibited from buying stocks in Korea. I believe only foreigners with an F-series visa (I think F-2) are allowed to buy stocks.

Once you hold 50,000,000 KRW in a KEB bank account you are eligible for a D-8 investor visa which you are I believe you are allowed to work on.

Beating the index is a shot in the dark.  Professionals have the same chance as a monkey throwing darts at the daily listings

Why would you want to buy US treasury bonds, are you out of your mind?

indeed. and daejeon didn't make up that analogy out of thin air--it has actually been documented.

Oops, forgot to mention that (though I rarely make things up), it is taught in the first lesson of any finance class, just as 'we know more about space than our own oceans' is taught in marine bio classes.

[Daejeon]

I was pointing out to another poster that the D-8 investor visa existed, as they mentioned F visas.

Listening to any Korean person talking about Korea holds bias.  Likewise to someone who is looking to make commission from you, of course they will make their product appealing.

Korea is a good LONG TERM investment, as it still hasn't started recovering from the beating over the last 18 months.  That is the reason you are making small gains.  If you think it is a great investment, quickly check your pension fund.

As for the words on volatility, you cannot be serious.  Watch the currency worm over any given day, week, month, year.

I agree having something to put your money in is a good idea, but perhaps try looking at the other countries from this "top 3 of 2011"

[rich]

.  There is a great English speaking consultant working in Seoul that can help you choose the right way for you to invest money, and his English is amazing (not like when other people say "yes i speak English," and then you speak at a regular pace with them and you realize youve just waisted your breathe)

Is he your husband by any chance??

[Davey]

Okay so a lot of people here "talking" about what you can and can not do without any real knowlegde or experience. #1: you do NOT need 50,000,000 won or any sort of special investor card. All you need is you ARC and any stock/investment company can open for you an account.  I suggest DAEWOO SECURITIES as they are recognized by Busan Bank, KB, and more. (meaning i can walk into KB bank and withdrawl money from my Daewoo Securities account.  It is true that more money help the investor (obviously) because the minimum investment for bonds are 30,000,000....and they yield a 15% return after a one year holding period, with virtually zero risk.

#2 Korea is one of the top 3 countries to buy stock in for 2011. Multiple sources confirm that not only is the Korea market growing at an incredible pace, it is one of the smartest investments you can make this year. Whoever keeps writing "volatile" has not done the research.  There is a great English speaking consultant working in Seoul that can help you choose the right way for you to invest money, and his English is amazing (not like when other people say "yes i speak English," and then you speak at a regular pace with them and you realize youve just waisted your breathe) but anyway, please feel free to write for advice if you need it.  I am currently in the stock market and making money (although slowly, but much better than sitting in an account at KB) and would love to give you more information. 

As with most "free advice" youll find on blogs, be wary. Many who post have no actual experience and are basically "guessing" how you might go about doing something...Investing in Korea is a brilliant decision and relatively easy to do, and the fact that your thinking beyond paycheck to paycheck is a great step in the right direction. : )

no volatility? you can't be serious. 15% return from a bond that's virtually free of risk? you can;t be serious about that either.

[Daejeon]

Because 15% risk free over 1 year is moronic.  Perhaps you misread terms, this is only believeable over a term of 3 or 4 years.

[Daejeon]

its not 100% risk free, but virtually..bc it is a bond. and its one year. the rub is that its 30,000,000 won minimum. you dont believe they would offer terms like this? if you seriously dont believe me i can prove it, im just trying to figure out what it is you find so unbelievable about this

Sigh, after you took a dig at people for expressing misinformation, which was infact correct.  You clearly do not understand financial markets.  There is nothing about 30,000,000 KRW being a 'rub', that is in itself stubstandard.  100% secured bonds pay out about 3% over multiple years, simply for the fact it is free of risk.  It is unbelievable because it undermines the entirety of the global financial markets.

If your husband has somehow managed to get you/get you to believe you are earning 15% risk free on the line 'because it's a bond' great for you.  Enjoy insider trading, criminal convictions in such cases span 4 degrees of separation.

[Davey]

its not 100% risk free, but virtually..bc it is a bond. and its one year. the rub is that its 30,000,000 won minimum. you dont believe they would offer terms like this? if you seriously dont believe me i can prove it, im just trying to figure out what it is you find so unbelievable about this

what i don't believe  is that it's virtually risk free--just because it's a bond that doesn't mean the issuer won't default. of course, there are other forms of risk entailed with a bond. if your husband told you otherwise, i suggest to others on this forum NOT to contact this individual--no offence.

[cragesmure]

Okay so a lot of people here "talking" about what you can and can not do without any real knowlegde or experience. #1: you do NOT need 50,000,000 won or any sort of special investor card. All you need is you ARC and any stock/investment company can open for you an account.  I suggest DAEWOO SECURITIES as they are recognized by Busan Bank, KB, and more. (meaning i can walk into KB bank and withdrawl money from my Daewoo Securities account.  It is true that more money help the investor (obviously) because the minimum investment for bonds are 30,000,000....and they yield a 15% return after a one year holding period, with virtually zero risk.

#2 Korea is one of the top 3 countries to buy stock in for 2011. Multiple sources confirm that not only is the Korea market growing at an incredible pace, it is one of the smartest investments you can make this year. Whoever keeps writing "volatile" has not done the research.  There is a great English speaking consultant working in Seoul that can help you choose the right way for you to invest money, and his English is amazing (not like when other people say "yes i speak English," and then you speak at a regular pace with them and you realize youve just waisted your breathe) but anyway, please feel free to write for advice if you need it.  I am currently in the stock market and making money (although slowly, but much better than sitting in an account at KB) and would love to give you more information. 

As with most "free advice" youll find on blogs, be wary. Many who post have no actual experience and are basically "guessing" how you might go about doing something...Investing in Korea is a brilliant decision and relatively easy to do, and the fact that your thinking beyond paycheck to paycheck is a great step in the right direction. : )

Yeah, be wary.  Be particularly wary of people giving "free advice" to steal more money from foreigners.  I've invested in several stock markets/currencies over the years, and have had consistently better returns than I would have had if I had invested in Korea/won.  I look elsewhere, and I make more money by doing so.  Political stability is a big plus, one that the ROK doesn't offer.  An unresolved, 60-year old war and politicians fighting in parliament like children on a daily basis should be a warning sign.