The greatest asset that young people have is time. When I joined the Federal Reserve, it was right around the time the financial crisis was just starting to recover. So, if you had invested in stocks back then, you would have seen substantial returns. If you had simply invested in stocks and forgotten about them, American stocks have risen significantly—by two or three times or even more. However, unless you can forget about that investment and let it sit for a while, it can be challenging to make a profit. The reason real estate can yield similar returns is that you can't sell it when it rises by 10%. Therefore, it’s necessary to manage your time to your advantage. For those who are wondering how to endure this, I’m currently discussing this with Professor Lee Yoon-soo from Sogang University. Now, I would like to talk about more realistic investment strategies.

우선, 저희 채널은 부동산을 중심으로 운영되고 있지만, 30대와 40대 분들도 많이 시청하고 있습니다. 이 분들은 아직 자금이 충분하지 않아 집을 구매하기 위해 어느 정도의 자본이 필요하다는 것을 알고 있습니다. 그래서 자금이 적은 상태에서도 투자를 하고 싶어하는 분들이 많습니다. 요즘 이러한 분들이 특히 관심을 가지는 것이 금입니다. 금리가 인하되면 금값이 오르는 경우가 많다는 이야기도 많이 듣고, 최근 금값이 많이 상승했기 때문에 사야 할지 고민하는 분들도 있습니다. 고점이 아닌가 하는 생각도 드는 것 같습니다. 그래서 금과 금리의 관계에 대해 설명해 주시면 좋을 것 같습니다.

일단, 채권은 금리가 높을 때 이자를 지급하므로 더 매력적입니다. 반면, 금리가 낮아지면 받을 수 있는 이자가 적어지기 때문에 금이 더 선호될 가능성이 있습니다. 그러나 금은...

금에 대한 수요가 증가한 이유는 여러 가지가 있습니다. 특히 전쟁이나 지정학적 불안정성이 높아질 때, 해당 국가의 통화에 대한 신뢰가 떨어지기 마련입니다. 반면 금은 어디서든지 교환할 수 있는 자산이기 때문에 안전 자산으로 여겨집니다. 최근 중동과 우크라이나와 같은 상황에서 금에 대한 수요가 증가한 것은 사실입니다. 

또한, 중앙은행들이 중국의 위안화로 거래를 늘리고 미국 국채를 매도하는 경향이 나타나고 있습니다. 과거에는 중앙은행들이 주로 달러나 국채를 보유했지만, 이제는 금으로 그 자산을 대체하고 있는 상황입니다. 중앙은행이 구매하는 금의 양은 개인이 구매하는 것과는 비교할 수 없을 만큼 많기 때문에, 이 변화가 어느 정도로 진행되고 있는지는 잘 모르겠습니다.

During the prolonged period of rising gold prices, I found it difficult to buy in, thinking that it was at a peak. It’s challenging to consider this as a significant investment opportunity, but it might be feasible to include it as a supplementary asset in a portfolio. However, the reason to invest cautiously is due to the high volatility; it behaves much like cryptocurrencies. Investing a large sum at once can be quite risky. Of course, if you hold it for about ten years, it could potentially appreciate like real estate, but the recent rapid increase in prices is attributed to central banks purchasing gold. This is partly because the United States has a significant amount of debt and needs alternatives to the dollar, leading to a demand for gold as a substitute for U.S. currency.

Because of this, there may not be a guarantee that this will continue. From that perspective, it could be very difficult for this to last in the long term. In this sense, when I buy this in the short term, I need to be mindful of the volatility I have to endure. Therefore, strategies such as buying in portions should be necessary. In any case, a rate cut is likely to act as a positive factor for gold. When interest rates go down, bond prices rise, so for investors, bonds should also be considered. However, from the perspective of someone receiving a fixed interest rate, the interest provided by bonds will gradually decrease, which diminishes their merits. Therefore, gold can indeed be seen as an attractive alternative. You just mentioned bonds, and in fact, since last year, there has been a lot of discussion about bond investments.

It had come out that the U.S. national interest rate would drop by 5%, and they said it would never come again. They mentioned that if you buy now, the interest rates will go down, and you'll make a lot of money. However, many people bought in and then couldn't hold on due to the severe fluctuations in interest rates. But now, it really seems like they are starting to drop, and there are discussions about whether it’s time to buy now. In fact, people have been buying since the discussions about the rates began, not just last year but probably since the year before that. Those who started buying then must have gone through a lot of hardship. Especially if they had bought at the peak, the dollar went up, and since the interest rates didn’t drop, the bond prices were supposed to rise but didn’t. Now that interest rates are falling, long-term products are more sensitive to these changes, so it seems likely that...

I believe most of you have invested in long-term government bonds. Long-term government bonds can carry inflation risks, as well as risks related to U.S. debt. We need to be concerned that even if short-term interest rates decline, long-term rates may not drop as quickly. Nevertheless, if we consider that short-term rates, like those on three-year government bonds, will decrease, it seems reasonable to expect some capital gains from those investments. Long-term government bonds are indeed more sensitive when interest rates fall, and the potential for capital gains is greater. However, I think it's important to keep in mind the risk that long-term government bond rates may not decline in tandem with short-term rates when U.S. policy changes. There are two factors to consider, one of which is inflation.

If inflation is high, long-term interest rates are likely to remain elevated as they reflect ongoing inflation. Therefore, even if short-term interest rates decrease, long-term rates may not drop significantly, which could result in lower investment returns. This means that while short-term rates continue to fall, long-term rates may stay relatively stable. 

Secondly, I mentioned earlier that China or central banks might buy fewer government bonds. If this happens, demand for long-term government bonds may decrease, or there could even be selling pressure. If there are buyers but also a significant number of sellers, whether it's China or other central banks, the rate at which long-term interest rates decrease may not be as pronounced compared to short-term rates. Consequently, despite long-term bonds being more sensitive to interest rates, they might not yield substantial returns, influenced by certain political judgments.

It could be that bribes are involved, so we need to consider that. The opposite case is the riddle of the Greenspan era. In May 2004, the United States did not continue to raise interest rates. However, when the Federal Reserve raised rates, while short-term rates went up, long-term rates did not rise much. At that time, it was surprising to see that central banks in China and other emerging countries were buying a lot of U.S. Treasury bonds. After the foreign exchange crisis, there was a strong demand for foreign exchange reserves, which led to significant purchases. Currently, while there is still some demand for such reserves, it may not be as high. Additionally, if there is a risk of U.S. Treasury defaults, the required interest rate on long-term bonds will increase, which means that short-term and long-term interest rates do not necessarily move together.

It may not always be wise to simply look at the duration and maturity. While it might seem that receiving high interest rates after 30 years is a good thing, we must also consider the political changes that could occur within those 30 years. So, it seems we need to take those factors into account. 

Now, speaking of politics, with the U.S. presidential election approaching, there are discussions about candidates like Harris and Trump. Just a few months ago, during incidents of gun violence, it seemed like Trump would be the one to win, but now it doesn't appear to be the case. There are many varying opinions on this. Can you explain how the outcome of the U.S. presidential election might affect the global economic outlook and, in particular, the impact on the South Korean economy?

It seems that generally, when there is a presidential election, the stock market tends to rise. This is likely due to the expectation that something will change, which can lead to economic stimulation. So, it seems reasonable to think that the market will go up. However, the concern is whether this news is already priced in, considering that it is relatively well-known. When it comes to the presidential election, whether it’s Trump or Harris, the probability seems to be evenly split among everyone. While we don't know who will win, if the decision comes down to such a tight situation, especially in the case of Trump, if he doesn't win, the uncertainty might increase significantly. On the other hand, if Trump does win, he does have certain policies in place, including some public policies. However, Trump's policies tend to be quite inflationary.

There are many policies that are likely to cause inflation, such as tariffs and lowering corporate taxes. Of course, lowering corporate taxes could lead to a boom in the stock market, but on the other hand, these measures can also trigger inflation. If inflation makes it difficult for the Federal Reserve to continue lowering interest rates, then these factors may not necessarily be good for the stock market. Therefore, it is important to consider these aspects in a comprehensive manner. Above all, the increasing uncertainty is a cautious aspect. This uncertainty will likely build up until the presidential election, creating expectations but also significant confusion. Once a decision is made, the process of resolving that uncertainty could lead to increased investment and improvement in the asset market. Thus, it is essential to reflect on these factors when deciding on investment timing.

Isn't it possible? Now that it's November, there really isn't much time left. You might have invested in something and thought you should have come out before that time, but if you're feeling anxious, it might not be a bad idea to just wait a bit. So, let me ask you this again. Earlier, you mentioned the generation born in developing countries and now the generation in developed countries. I think one of the biggest struggles for today's youth is related to this. They were born in developed countries where society is stabilized and economic growth is now stagnant. As a result, there are expectations from their parents, who might say, In our time, we had to endure much more, or You can handle more hardship. But from my perspective, I can’t...

There isn't much available. The money, well, real estate prices are extremely high, and there’s nothing else one can do. Because of this, I think some people are just giving up on investing altogether. So, as an economics professor, do you have any advice for the current youth or students on how to solve these economic issues? 

Ah, this is a really difficult problem. I constantly ponder this when I meet students, but I worry that if I say something, I might come off as an old fogey, so I tread carefully. In the past, if you invested in the South Korean stock market, you could expect it to rise during a bull market, and the same was true in the U.S. But now, people say that it’s a market where stock pickers—those who choose specific stocks—are the ones who benefit. So, while the market itself hasn’t changed much, if you look closely, some stocks are rising significantly.

There are some things that are missing, right? So, in our country, it's definitely a more difficult conversation. Back in our parents' generation, it was certain that wherever you bought land, it would appreciate in value. But now, you have to be selective about what you buy. I think it's the same with stocks and other assets. However, when we talk about this, it can definitely be perceived as something that only applies to a certain group. But the greatest asset that young people have is time. What this means is that you can buy something and wait for it to grow. So, when I say that, someone might wonder, What are you talking about? I need money right now. The time we're talking about isn't 20 years; of course, if you give it enough time, you should be looking at things over a span of 5 to 10 years. This is what I was thinking about when I came in and adjusted my views on finance.

It was an incredible recovery, and if I had invested in stocks at that time, I would have made a significant profit. The U.S. stock market has risen tremendously, possibly doubling or tripling in value. However, if you don’t set aside some investments and forget about them, it can be difficult to realize profits. 

The reason real estate can generate such returns is that I can't sell when it has increased by 10%. Therefore, it is necessary to give yourself time that works in your favor. For those who wonder how to manage this, I believe they should consider operating with two separate accounts. One account should be for good stocks that you are confident will rise in five years without touching them. The other account can be for short-term trading, which requires a different strategy.

I think investments should be considered separately. Then, choosing which stocks to invest in is quite challenging. Earlier, you mentioned bonds, and one attractive reason for certain bonds is that interest rates are decreasing. When interest rates go down, there are investments that can benefit from this. In our country, I believe it’s very important for our people to be smart. When we think about the biotech field, someone might say that the health and biotech industry should be promising. However, not just in our country, but when interest rates are low, sectors like health and biotech tend to borrow a lot of money for investments and need to borrow for a very long time. So, borrowing money...

The burden regarding various matters is lessening. So, this does not mean that everything is improving, but if we have to choose, we need to be very careful in our selection and consider how we can group things together. Ultimately, when the market situation changes, it is not necessarily a bad thing; there are definitely aspects that can improve as well. Therefore, we need to find those opportunities and make efforts. It is meaningless to just focus on one thing and think, It's over anyway. I believe that is the message being conveyed. 

Now, we've discussed various topics, and as the end of the year approaches, many people may be pondering how to respond to their investments in light of potential interest rate cuts. Over the next six months or so, interest rate cuts are expected.

Will it be the biggest issue, or are there other issues that might impact the economy? First of all, I think the biggest one is the presidential election that you just mentioned. Depending on the outcome of the U.S. presidential election, many policies will change, which will affect interest rates, inflation, and the industries that are expected to benefit. This is because the two presidential candidates have different views, and their approaches towards exporting companies and businesses that trade with China also vary. Therefore, it will be important to see which companies in our country will benefit and which stocks in the U.S. asset market will continue to thrive. For example, will policies related to the IRA or semiconductors, like chips, continue to be beneficial, or will they be overturned? Additionally, what about policies related to environmental sustainability?

Will there be a possibility that things like petrochemicals will improve instead? There are changes that come with Trump being in power, right? If Trump becomes president, in a way, we should observe these things because politics plays a significant role in determining outcomes. I think that during the remaining half of the year, this will be the biggest variable. 

As for interest rates, they have already begun to change, so we should take a step back from that and focus more on the presidential election. Regarding interest rates, I was holding on to the belief that they would decrease, and now it seems that the decline is becoming visible. Therefore, it would be wise to adjust your portfolio accordingly. 

Lastly, our channel attracts many viewers who are interested in wealth management, whether it's through small investments in stocks or buying homes. So, regardless of the approach...

Many people have invested their assets somewhere, and given the current situation with interest rate cuts and the presidential election, I think their minds might be a bit complicated. In such times, it would be good to explain what kind of judgment is advisable. When someone first starts investing, they set a goal, right? If the situation hasn't changed significantly, it is necessary to stick to that goal. Of course, the macroeconomic environment and other factors they considered back then might have changed significantly, and in such cases, they should adjust their strategy. However, if things haven’t changed much, being overly reactive can lead to instability and often results in making regrettable decisions later on. Therefore, it is important to align the strategy with the initial criteria they set when they made their investment choices.

From the beginning, when making a choice, it is essential to carefully consider whether to adhere to a strategy. It’s not about someone telling you what to do; rather, if I have a specific income goal over several years, then, of course, for something like pocket money, it might be fine to take some risks to achieve returns, or I might decide against it. However, if I have a long-term goal for asset growth, I believe it’s crucial not to make unreasonable plans and to align my actions with that timeline. I should set a clear target for the level of volatility I can withstand and the returns I aim to achieve, and it’s important to stick to the initial goal I set. The challenge with investing often lies in the absence of clear objectives or criteria, which leads to fluctuations in emotions and decision-making. This is what makes it difficult, as I reflected on earlier.

If you have made a good choice and done well, it's necessary to trust that things won't change. I think that can summarize our discussion. We have talked with Professor Yoon-Soo Lee from the Department of Economics at Sogang University about various topics, from the global economy to the impact of interest rate cuts, and what investments we should consider. I would like to express my gratitude once again for taking the time to watch. Now, I will say goodbye to the professor. Thank you for joining us today, Professor.

"그냥 다 포기할래요" 저축도 투자도 포기한다는 청년들 [이윤수 교수 3부]

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"그냥 다 포기할래요" 저축도 투자도 포기한다는 청년들 [이윤수 교수 3부]

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