Today is the last session, and I want to make sure to convey a few key messages before we wrap up. So, I’m stepping forward to share some thoughts with you. As you can see, we are in an era where global investment is essential. I returned to Korea at the end of 2013, so it has already been about 11 years. Right after I came back, I emphasized the importance of global investment. At that time, many people had a strong aversion to real estate. Where were you? Were you in China? I felt quite frustrated during that period. Therefore, through today’s lecture, I want to raise awareness about how critical this moment is for us. The U.S. stock market has risen significantly since I returned to Korea, starting from 2015.

At that time, other securities firms had just started conducting research, and everyone seemed to be focused solely on China. It wasn't about global investment; it was all about investing in China. So, I completely overhauled our department, and when I added all the analysts, there were over ten of them, and they were all fixated on China. I changed everything because I believed we couldn't ignore the U.S. market. I remember my senior center manager confidently saying that the U.S. was finished, and I worried about how he could say that so boldly. As I will discuss today, back in 2015, the S&P 500 and NASDAQ were precisely at 4,200. At that time, I predicted it would reach 8,000, and after hitting 8,000, I said it would go to 12,000, and now it has reached 17,000. Of course, there were corrections along the way, but now it has once again surpassed 17,000.

I'm currently observing a trend where the S&P 500 index is around 20,000. Therefore, investment in the U.S. is essential. Ultimately, we need to know how much further we need to rise, right? So let's discuss this aspect. 

Regarding the cup and handle chart, I must admit that I'm not a technical analyst. However, since there are so many discussions about technical analysis these days, I thought it would be good to take a look and talk about it. As noted, the S&P 500 was at 4,800 at the beginning of 2022. After breaking this level, the interest rates were rapidly increased, leading to a significant decline. When it started to recover, what was the exact timing? Of course, it would have been great to catch it right at the bottom, but even if it was a bit late, the key moment to enter was when it began to break through this previous high point, which was precisely in January of this year. Since January, the S&P 500 has risen by about 20%. However, this is currently quite...

It's an important point. With a 20% increase, we just talked about AI semiconductors. The stocks we hold are four times that. The signal is that a reoccurrence of the internet cycle from 1995 to 2000 is happening right now. We believe this is the case. So, will it end quickly? It could end quickly, but it could also rise more and end faster. Therefore, this is not the time to be complacent; we need to chase after it. Currently, it's at 5,500, now up to 5,700. This was just two weeks ago, and it has already risen this much. So, we look at these statistics. While discussing AI, we often refer to many statistics. When I was at a securities firm, I created a robo-advisor, and during that process, we looked at a lot of statistics. But the important thing is...

What I want to discuss here is the trend of the upward market after it began to break the monthly high this year, as seen in the cup and handle chart. In the past, there have been 13 instances of this pattern, and the average duration for 12 of those instances is that the market rises for 45 months. If we calculate 45 months from January of this year, it brings us to 2027. If we look at the median value, it suggests a figure for 2026. In any case, we are anticipating seeing a value of 7,000 soon. Up until now, I have suggested that we recognize this and invest accordingly. Earlier today, when Park Se-jeong came by and spoke with the representative, I mentioned that I believe the S&P 500 will surpass 7,000. It feels like that conversation was about two years ago. Regardless, the important point is to aim for 7,000.

Until now, it seems that we will not change much. Of course, whether we will go up to a thousand or not is something we will continue to assess in the future. However, the example I showed you earlier was based on statistical data, and there were 13 cases, so we cannot be certain that it will happen that way. Regarding whether it will happen or not, we are, after all, starting from a mentalist perspective, conducting corporate analysis, examining the market, and looking at macroeconomic factors. Therefore, we ultimately assess whether it can go that way. From a fundamental analysis standpoint, if you look at the United States, when inflation stabilizes at around 2-3%, the price-to-earnings ratio can go up to 25 times. This is quite possible. Why is that? A simple example would be this: the current interest rate, combined with inflation at 2-3%, additionally...

When calculating the growth rate including some adjustments, I found that even if the average interest rate is high, it does not exceed 4%. So, if we take 1 or 4%, it becomes 25 times. However, the important point is that if inflation drops too much, it completely affects deflation. On the other hand, if inflation rises too high, we have to raise interest rates significantly, which leads to considerable changes. As you can see, this period represents the Goldilocks zone, while everything else is much lower. So, we are returning to this era. Now, one question that can be raised is: if the interest rate is 4% in the U.S., what is our country's current interest rate? It's 3%. If we take 1 divided by 3, it should be 33 times, but why is it only eight times for our country? The simple calculation is about how much...

The money earned in a year is returned to the investors. We keep talking about value and programs, right? The reason for this is that, in the United States, the total amount earned by the S&P 500 is returned 95% to 100% to you in a year. Therefore, it is natural that the interest rates should be applied accordingly. Now, what is the current return amount in our country? It is around 25%, which is not enough. So, if you multiply 33 by 0.25, you get a certain result. 

Now, why has Japan's figure increased so much? Because a country that used to give little in dividends has raised it to around 50%. And why is Taiwan like this? Because the interest rates are currently around 2%, and they are giving a 50% dividend, which results in a 25 times return. Ultimately, we need to look not only at the interest rates but also at how shareholder-friendly the policies are.

In conclusion, the United States seems to be heading in a direction where public relations (PR) will double. This is because we are currently in a phase where inflation is decreasing. Historically, when inflation has fallen, it has always led to a significant increase in prices. Currently, in less than two years, prices have risen by about 60%, but we need to wait and see how much more they will increase.

Now, recently, there has been a lot of talk about interest rates. Yes, they have been lowered by 0.5%. This marks the beginning of interest rate cuts, but opinions are divided. Some say that a recession is imminent, while others believe that a recession will not occur. There are even those, like myself, who think that a bubble might form. I tend to speak quite strongly about this because, when I first started, I visited many banks in the Federal Reserve system.

I used to work in banking, and I have started to delve into energy banks. So, I am looking at the banks and trying to determine how much of a recession we might face. However, at this current point, considering the inverted yield curve and various scenarios for interest rate cuts, I believe the probability of a recession is only about 5% to 10%. I have been vocal about this. Before the IMF crisis, I mentioned that our banks were struggling, and I wrote articles for the Financial Times and the Wall Street Journal, which gained quite a bit of attention. Back in 2006, I also predicted the 2008 financial crisis. So, to conclude, if interest rates are lowered at this timing, the probability of a recession is still only 5% to 10%. Now, what happens to the stock market? In the U.S., typically after one to two years, the market sees a return of 20% to 40%.

When a recession occurs, it goes the opposite way, decreasing by 1% to 30%. So, what you need to decide now is whether a recession will happen in the United States or not. Many people are skeptical and believe that a recession will not occur. Let's see why. I have been saying for two years that it won't happen, and in fact, I think I've been saying this for a year and two years ago as well. Now, let's look at the reasons. Back in 1997 and 1998, I calculated that there were significant problems in our country's banking sector. Later today, I will discuss similar issues regarding China. If you look closely, we examine government debt, household debt, and corporate debt. The most important point here is corporate debt. The reason our country experienced the IMF crisis was that the debt ratio of corporations was too high compared to GDP. Additionally, interest rates...

It was extremely high. In a situation where external debt is large, if funds are withdrawn, it leads to inevitable failure. Fortunately, interest rates have decreased significantly now, which allows us to endure that debt ratio. When looking at the United States, it is the same case. The question is whether it will burst or not. Currently, the corporate debt ratio in the U.S. is at its historically lowest level. Although you may have heard that the number of bankrupt companies is increasing, that refers to the overall number, which doesn’t carry much significance when calculated as a percentage or in actual numbers. In any case, the overall debt ratio is important. However, in this situation, there is no possibility of a major corporate crisis in the U.S. At that time, I was working at Citigroup in the United States.

I was speaking as a research strategist. At that time, the last report I wrote predicted that a major financial crisis would occur, which I wrote in 2006. At that time, Citigroup's stock price was $45, and when the financial crisis hit, the stock price fell to $40, resulting in a 99% crash. At that moment, it was natural to be concerned because the household debt ratio was 100%. This is the exact environment we are in now, so we must be cautious.

Ten years ago, when I came to Korea, I would ask people, Why aren't you buying real estate? You must buy real estate. If you don't own even one house, you will feel a tremendous sense of alienation in ten years. I used to say this, but now I am asking, Why do you own two properties? Why do you own three? Why do you own four? I will continue to ask these questions because our country's household debt ratio is here, while where is the U.S.?

Seventy percent of our country had a household debt ratio of 77% compared to GDP ten years ago. When we talk about the logic of economic recession, we often discuss the phenomenon of the inversion of short-term and long-term interest rates. As a banker, I understand this very well. I have talked about this a lot before. However, the inversion of the yield curve does not directly cause economic recession. Instead, it reduces the interest margin for banks, and when the interest margin shrinks, lending decreases. When lending decreases, the economy goes into recession. This is something we all know. But at this current point in time, just because the inversion of the yield curve has been resolved, meaning the ten-year minus two-year spread has normalized, does not mean that the rate of loan growth will suddenly drop sharply. So, what is actually happening? You may not see it clearly, but this gray area...

When a recession occurs, there are cases where the growth rate of loans sharply decreases. However, when there is a rapid increase, a recession does not happen. This is a very obvious logic. Why would a recession occur when money is being lent out? If we look at the current situation, it has gone into the negative and is now rising. So, the important factor is not the inversion of the yield curve but whether loans are being increased or not. Currently, interest rates are being lowered, which means loans are increasing. The speed at which loans are increasing is currently at plus 3%. How far can it go? In my personal opinion, it seems like it could reach 10%. The current economic growth rate in the U.S. is around 3%, but the actual growth rate is expected to decline to the 1% range. No, in fact, it might be even lower.

It could go up; I think so. The loan-to-value ratio is 70%, and there are no countries that fail with that. I went to Beijing in 2011, and back then, I mentioned something about China. At that time, George Soros said that China would fail, discussing financial issues and so on. When we looked into it, the loan-to-value ratio in China was 68%, not the United States. There was no way it would fail. However, nowadays, I speak very negatively about China; I will explain that shortly. Anyway, from the perspective of the United States, this is the situation. Financial crises are not coming from here. Cases of rapid sanctions being strengthened are not common. As a result, loans increase, and as the loan-to-value ratio rises, the trend of delinquency rates goes up but eventually peaks and then starts to decline. Therefore, in my judgment, the economy will maintain a stable growth rate for the next few years.

I will try to find the answer and one of my missions is to identify when and at what point a major crisis will occur. Now, let me explain this part. The biggest reason people are saying that a recession is coming is very simple: the labor market. The labor market is tightening quickly, that's true. But why isn't the wage growth keeping up? Currently, the number of jobs is increasing, not decreasing. Many people talk about the three laws, but in reality, the number of jobs is continuously rising. In the midst of this, if you look at the demographic changes, they are expected to continue increasing until 2030. The reason we are worried about the United States and China is that the aging phenomenon is happening rapidly, and our birth rate is extremely low. These aspects are very concerning.

It's a complicated issue, but to put it simply, in countries where the population is increasing, wages are rising, yet we are experiencing an economic downturn. I have never seen anything like this. Additionally, the fact that the United States is changing is a crucial point in today's discussion. One significant factor is AI. Earlier, we talked about semiconductors and AI, and how much the gap is widening and why our country is currently facing a tremendous crisis. This is what I want to highlight. Given this situation, the U.S. GDP growth rate is reported to be 2.5%, but it has recently increased to 2.9%. The actual growth rate continues to exceed 2.5%. It's truly remarkable that the largest economy in the world is growing like this. However, why is the wage growth rate not very high despite this? It's because productivity is increasing with the introduction of AI, leading to higher productivity.

This is because it is being pulled up. Now, regarding interest rates, this has not been updated yet, but I will explain it simply. Interest rates have started to decrease, going from 5.5% down to 5%. The move towards 3.5% looks very stable. As for how long that period will take, I will just have to keep an eye on it. However, at any moment, if it drops quickly to 3.5% or even lower, or if it decreases significantly, and suddenly inflation rises again, that would be a headache. Previously, lowering interest rates provided liquidity, and liquidity is good for the economy and the stock market. So, for now, until we see a reduction of 200 basis points, you should view the market positively. In the past, when interest rates were first lowered, like in 2007-2008, we saw a recession immediately after the decrease. The same applies here.

As soon as the interest rate was lowered in 2019, the economy began to show signs of recovery. People have been using the logic that the economy is improving because rates have been cut twice in the past, but I believe this is incorrect. I think this is related to the classical cycle; you see rates being raised, lowered, raised again, and lowered once more, and then raised again, all while the economy has not experienced a recession. This was during the internet cycle, and now we are entering a new cycle similar to the internet, which is the AI cycle. The speed at which this cycle develops, how much it will enhance productivity, and how long it will last are crucial points for our investments. I understand that this can be confusing; during the previous internet boom, there were also differing opinions. I remember clearly that there were people who said the internet would not succeed.

There was really a lot of discussion about who would write it and various opinions were shared. But if you look, every time this happens, there is a 10% drop. However, the important thing is that everything that has fallen eventually comes back up. This is true; the S&P 500 has risen by 200%, and even more importantly, the Nasdaq falls more but also rises more, showing a 533% increase. So, there will be moments that shake you, making you want to sell Nvidia. But I don't think now is the time. Of course, at some point, you need to recognize when to make a change, and I will make sure to communicate that as best as I can. For now, we are in a progressing cycle. We may not know exactly whether we are here or there, but you can observe how the cycle changes. Over the past ten years, I have been trying to understand this and also...

What I want to emphasize directly is that investments in the U.S. should not be approached in a Korean way. You need to focus on long-term investments, select good stocks, and consistently invest in a systematic manner. However, there is a cycle to consider. This cycle lasts about 13 to 14 years, during which the market goes up and down and experiences periods of sideways movement. During these periods, it is somewhat acceptable to engage in trading as well. This is because the drop from the peak to the bottom can be around 50%. The important point is that we have already passed this period. When did we pass it? We passed it in 2013. After that, the bull market began, and as you can see, we are now in the 16th year, the 20th year, and currently in the 12th year. So, if we only consider the cycle, it is projected to continue until 2028, and if it goes longer, it could last until 2032.

There is, of course, the question of whether this is simply a story from the past, and we need to continue testing this. However, up until now, no one has been able to show me that this is incorrect. If you think carefully about how the market is intertwined with the AI cycle, even if it's brief, many people talk about 2026, but that might be too soon. I personally think that the possibility of 2028 is higher. Some people even say it could go until 2032, but that will require continuous testing. 

So, when you consider investing in the U.S. market, you can think of it as similar to how we used to invest in our country a long time ago. About 40 years ago, we could just put money in savings, right? For example, if you saved with an interest rate of 8%, you could buy a house in ten years. After that, you could just keep buying real estate and benefit from compound returns.

Since we have seen double-digit numbers, we are no longer in that era. However, the situation in the U.S. is the same. If we calculate the S&P 500 from 1997 until now, which is nearly 30 years, the compound annual growth rate is exactly 8%. But if you buy and sell frequently, the compound annual growth rate drops to 3%. These are interesting numbers, and I don't know why this happens. In South Korea, what has been the average return on the KOSPI over the past 10 to 15 years? It's about 3%. Many people frequently buy and sell. This means that if you trade a lot, you end up with lower returns compared to a long-term perspective. In the U.S., if you buy and sell, you get that 3%, but if you hold onto your investments, the return can be as high as 88%. The important point is this: there are cases where the annualized return can reach 15%. Looking at this, during the most significant drop over ten days, we see...

If you don't hold stocks, this is what happens. When does this happen? It happens during certain times. What I mean is that it is not now. A time will come when there will be a sharp decline, and that will occur during a comprehensive crisis. When we talk about systematic collapse, this phenomenon will occur, where the market drops by 50% from its peak to its trough. The timing of this could start in 2026, 2028, or even 2030 or 2032. There is no definite answer. The point is to observe this together. In any case, if you manage to navigate through it, you will achieve returns. However, you don't necessarily have to do that. What you should do is, as you can see here, by selecting stocks, you can see this go up; it can double. Yes, a compound annual return of 30% is possible. So right now, we are in a rising cycle, and for example, you could buy Nvidia and sell Intel. Ultimately, what I'm saying is that among the stocks in the S&P 500, which ones are better?

You just need to determine whether it is competitive or not; you can choose one of the two options. In conclusion, if you do that, you can achieve a 15% return even during a sharp market decline. This is how you should approach the U.S. market; it is extremely important. Now, let's talk about the portfolio. I often mention the 80% stocks and 20% bonds allocation. Why? Because what is the current yield on U.S. Treasury bonds? It is 3.7%. It will likely drop because the benchmark interest rate will decrease, possibly falling to 3.5% or even 3%. However, I believe the long-term rate will not drop significantly below 3.5%. The possibility of that happening is very low. Why should the interest rate be at 2% when we have AI coming in, inflation, and a real growth rate of 2.5%? It just doesn't make sense.

It's important to understand that just because you've experienced a 2% interest rate in the past, you shouldn't expect that when investing in bonds. So, the conclusion is that over the next ten years, the yield from bonds will be around 3.5% annually. If you are satisfied with that, then you can invest. If not, you should refrain from investing. The question then is where will you find higher yields? Historically, when looking at global asset allocation over the past 100 years, the average return has been around 9%. If bonds are generating 3.5%, then the remaining 60% must yield significantly more, ideally over 10%. In fact, as I showed earlier, it can generate 15%. Therefore, rather than a 60% stock and 40% bond allocation, consider an 80% stock and 20% bond strategy. So, where should you invest?

The U.S. Nasdaq is, in my view, a law of invariance. At this point, how much am I seeing? Many people say that only the U.S. has risen and that only the U.S. is doing well. However, if you divide the U.S. market capitalization by the global market capitalization, it accounts for 45%. By the end of this year, it might have risen to around 50%. During the financial crisis, it was at 30%. So, it has increased by 20 percentage points. But back in 1974, the U.S. market capitalization reached as high as 65%. So, do I think the S&P 500, which I showed earlier, will stop after rising 40%? I don't think so; I lean more towards it rising further. This is because the internet cycle has created a significant gap. Just a few years ago, as the director mentioned, China and the U.S. were quite similar, but now there is a tenfold difference. That's the conclusion.

We have come to a point where we need to quickly sever our connections with China and continue moving towards the United States. All policies and directions should be focused on that. We shouldn't think that we've already cut ties; the part we are struggling to keep up with is software development. We really need to excel in software development. Fortunately, we do have some time to catch up. When we look back at the internet cycle, you may not see it clearly, but at that time, internet penetration was around 5%. Now, if we calculate it based on the overall situation with ChatGPT, we are currently at about 5% penetration. But how much has the penetration been in the United States and globally?

How much has it been? 40%? Yes, the gap is widening significantly. The frequency of use among the citizens in the U.S. who use ChatGPT is at least five times more, using it once a day. Are you using it? You should be. That's how you improve your questioning skills. The conclusion is that the current cycle is still a good timing for hardware development. While software is very important, hardware still needs to be established. Therefore, SK Hynix and Samsung Electronics are significantly involved in the development of HBM hardware, and NVIDIA is also contributing to this hardware development, so there is still some time left. However, the U.S. is trying to rely more on Micron, continuously widening the gap.

Parts are emerging. When looking at the future growth rate, we found an average annual growth rate of 26.8%. Even when considering just the server side, there is still plenty of growth potential. I believe we are in a significant growth phase. This isn't about the existing cloud AI servers; rather, I think we are still in a growth period that has a long way to go. How can we confirm this? You can refer to the productivity indicators. Recently, the Federal Reserve released an analysis of the impact of AI on productivity. It's essential to take a look at that. The important thing is that when productivity grows at an annual rate of around 2% to the mid-2% range, we have seen tremendous bull markets. As I showed earlier, the S&P 500 rose significantly, by 200%, and the Nasdaq increased by 500%. There was a period when productivity increased by 2.4% annually.

지금 보시면 어떻게 되고 있습니까? 지금 가파른가요? 예, 이게 지금 두 배죠. 2.9% 성장, 2.7% 성장, 매년 2.7% 성장한다고 생각해 보십시오. 이게 어느 정도의 기업 이익에 영향을 미칠지, 이걸 놓치시면 안 됩니다. 이 사이클, 물론 저는 캐시 우드 님처럼 이렇게 인터넷 사이클이 세 배로 간다고 생각하지는 않습니다. 캐시 우드 님이 얘기하는 건 미국 GDP 성장률이 8% 나올 거라고 하시는데, 그건 좀 너무 과장된 것 같고요. 제 생각에는 미국의 GDP 성장률을 1% 포인트는 늘릴 수 있을 것 같습니다. 물론 케인즈가 과거에 틀렸던 적도 있었지만, 여기 보시면 1% 정도로 계산되고 있고, 연간 2% 포인트로 계산되고 있습니다. 그래서 저희가 판단하기에는 연간 1에서 2% 포인트 정도의 추가 GDP 성장률을 창출해 줄 수 있는 여력이 AI에 있다고 생각합니다. 미국이 보시면, 아까 고용 때문에...

I know you are all quite worried, but the share of employment only accounts for about 20%. The increase in productivity is driving GDP growth, which accounts for about 70%. So, we believe that with the advent of AI, many changes will occur. Now, we have five minutes left, and during the internet cycle, there were really easy opportunities to make money. When productivity increased by 2.4%, the S&P 500 rose by 18% annually, the Nasdaq increased by 32%, and the Nasdaq 100 went up by 40%. The reason for this is that these companies were relatively small, which significantly boosted compound returns. However, back then, we were in an era where the internet did not exist at all. Now, we are entering the AI era, which is building on a solid foundation, so the speed of change is faster. Moreover, productivity increases are likely to be even higher. Therefore, the overall numbers are expected to rise.

The Nasdaq includes many companies related to stocks, and when comparing the Nasdaq 100 to the S&P 500, there isn't a significant difference. Ultimately, the important question is how much the S&P 500 will rise annually. On average, it shows about an 18% increase, while the Nasdaq exceeds 30%. Overall, this means that the compound annual growth rate has provided returns of around 20% over the past five years. 

Now, during the past year, with the rise of the internet and, excuse me, AI, how much has the S&P 500 increased? It has risen by 28%. I believe it can show an increase of around 25%. We need to continue assessing how far the annual compound growth rate will go. Of course, there are those who think differently. With interest rates decreasing, they argue that large tech companies and AI are no longer necessary and want to discuss interest-sensitive stocks instead.

There are many options, so we also look for stocks that benefit to some extent when interest rates drop. If we look into it, we find housing construction, small and medium-sized growth stocks, and dividend stocks. We should also consider around the Russell 2000. However, I don't think I'll look into energy, financial stocks, commodities, or REITs. In particular, I believe it's not the right time to look into bank stocks. 

So, we have pulled together a representative list of ETFs related to AI. If you look at this list, it includes a mix of both hardware and software. Nowadays, most large companies are not just focusing on hardware; they are also working on software. This is an important aspect to understand. The reason we emphasize this is that if we only focus on hardware, we might miss out on significant opportunities because the software side has not been keeping up. This is the current situation in our country.

It's a crisis. Now, I have three minutes left for China, so let's take a look at this. How serious is the crisis in China? This is the debt compared to disposable income. I mentioned before that it was a big deal in the U.S., and now I’m saying that China is in big trouble, right? There’s no way to predict how much the real estate prices in China will drop in the future. So, yesterday and today, they are touching the interest rates and reserve requirements. Why? Because the U.S. has finally lowered interest rates. So now, they are using the last bullet they have. Once that bullet is used, it’s over. I believe that within the next three years, we could see a scenario similar to what our country experienced with the IMF. We really need to be careful. Why did I think that all the banks in our country would go bankrupt? Well, I didn’t say they would definitely go bankrupt, but this phenomenon emerged because of that. The margin call crisis is severe.

The bad debts are skyrocketing, but the numbers haven't been shown. They have all been classified as fixed assets. They referred to them as fixed rather than bad debts, so we couldn't see the interest, and then it exploded. Now, foreign direct investment (FDI) is leaving China; money is flowing out. Foreign investors are not investing. So, they have to manage with what they export themselves. Where are they doing that now? They are doing it on a one-to-one basis with other countries. The U.S. can no longer participate, and once that ends, it's over. China is now starting to use its last card. You need to get out of this situation well. And where do we need to go? We need to go to the United States. That's it. Thank you. I appreciate the insightful lecture from the head of the Global Asset Allocation Division at Yuanta Securities. It was a very thorough and consistent analytical perspective that we usually find hard to access.

I heard your comments, and at the end, especially regarding the five promising ETFs, I would appreciate it if you could take a good look at them. I also found that page quite eye-catching, and I think it will be very helpful. However, the ongoing question is about the content. I would like to address that. The U.S. stock market has risen by about 200% over the past period, and there was also mention of the S&P 500. This year, it has recorded significant all-time highs, so from the perspective of someone entering the market now, it feels incredibly burdensome. Honestly, for someone who hasn't invested before, looking at a situation where they might consider buying a stock, it seems like it would be hard to sleep after making that purchase. What advice would you give regarding this? First of all, before I respond, I want to clarify that the stocks I showed earlier are not recommendations. We cannot make recommendations.

I would like to remind you once again that there are companies like this. These days, compliance is very important. As I mentioned earlier about the U.S. stock market, it seems that no matter how you measure it, it looks like it’s at a peak. A lot of people are talking about the market capitalization to GDP ratio. Right now, it’s almost 180% to 200%. Back when the financial crisis hit, it was below 150%, and now it’s even higher than that. What this means is that you need to understand that the profits of American companies are influenced by the U.S. GDP. For example, the entire S&P 500 consists of about 60% domestic and 40% foreign revenue. So, how should we interpret the GDP numbers? Ultimately, how do we conclude this?

It is very important to observe. When looking at the Shiller index, the price-to-earnings ratio may seem high, but if you think about it again, why is it at 25 times now? It wasn't always the case that American companies had a payout ratio of 95% or 100%. Twenty years ago, that wasn't the case, right? So, while the idea of a 1% interest rate may have seemed unreasonable back then, it makes sense now. Everything changes. What matters is how much money you will get back in a year; that is important. This is true for the stock market. So, when looking at the price-to-earnings ratio or various other indicators, buying American stocks will yield a lot more money for me. That's the key point. Therefore, I would say we are not at a peak yet. Now, this is a brief aside, but when Trump was elected...

If the customs duties are raised by 100%, it will create an environment like that of 1918 and 1919. What happened back then? The U.S. stock market, particularly the Dow Jones, experienced a tremendous surge, skyrocketing by 300%. After that, it crashed. You know about the Great Depression, right? In 1928, the reason for this was that profits from other countries were brought to the United States, and then that ended. So, if Trump were to become president again, we might head in that direction. What I keep worrying about is how much higher it will rise now, since it has already increased significantly, or how much I might miss out on further gains. You have aligned with that perspective, and I remember talking about the Korean real estate market exactly ten years ago. Do you recall how much it was rising back then? Everyone was saying that Korean real estate was...

It's expensive, or there's a population cliff, or the debt ratio is too high. Even employees working at banks can borrow money but choose not to, so they haven't bought houses. And now, look at how much real estate has increased. It's the same story. When calculated at the current interest rates, what is the return on equity (ROE) for American companies? It's about 25%. They all return that to you. If we calculate based on interest rates, how much more will it rise? Everything can be analyzed. I don't think we're at the peak. Right? So, let me ask another question. For example, if we have an extra 1 million won each month and want to invest in American stocks, we're considering two options: should we buy Nvidia stock or invest in a fund that includes the S&P 500, or perhaps an ETF? The answer is difficult. Let's see, I would lean towards Nvidia.

I like it, but I also really like Tesla, just like Nvidia. So, if I have to pick one stock, what I'm saying is that it's a battle of probabilities. For example, choosing one stock out of many is really difficult. It can't be the definitive answer. Let me give you a simple number: over the past 15 years, Nvidia's compound annual growth rate has been 80%. What did we say about the S&P 500? It was 10%. So, this company has achieved eight times that over a decade. Will it continue? I'm not sure. Let me mention Samsung Electronics again. Samsung has achieved a 12% compound annual growth rate over the past 10 years. But what about the KOSPI 200? It was only 3%. So, they have outperformed it by five times. But what about the last three years? Samsung has only achieved 2%, which is worse than the KOSPI. So, it could go that way.

I'm not sure about that. So, I think it's not a good idea to just pick one stock and keep investing in it. For example, if you're continuously investing in the S&P 500 and you have really analyzed a particular stock and understood it well, then I believe it's right to keep investing in it. 

Anyway, until 2028, we can expect a bullish market. My basic premise is that, but we need to see what happens in 2026. The reason is that if everything rises from now until the third quarter of 2026, it could potentially end there. And the environment is constantly changing, so the numbers will keep fluctuating. That's why we are using AI these days, because we can input data and run analyses. We need to keep adjusting our strategies accordingly.

You need to do it, but I think it will be okay until 2026. Yes, you briefly mentioned the U.S. presidential election. The results will come out on November 5th, but the dollar seems to be declining a bit after the U.S. lowered interest rates, although it is still at a relatively high level. What is your outlook on the dollar? 

I don't think the pace of interest rate cuts will be that fast. Currently, the low interest rate is around 3%, which I am referring to as the benchmark rate. However, it is a similar case to what we see in our country. Another important aspect to consider is that we are looking at this in conjunction with the situation in China. If China faces a crisis, we could see a phenomenon of rising interest rates significantly.

You need to keep this in mind: you shouldn't think that it won't go up. So, in that case, it's better to just comfortably hold onto dollars. This is my personal opinion compared to the Korean won. There are many questions, but I would like to wrap this up due to time constraints. I would like to thank Director Yoo Dong-won from Yuanta Securities for all his hard work today. Thank you. Please give a round of applause. Thank you.

유동원 본부장, “향후 2년간 경기침체 없을 것...미국주식 최대 25%상승"

유동원 본부장, “향후 2년간 경기침체 없을 것...미국주식 최대 25%상승"