Hello, this is Baekseong from Baektama. Today, if I had to choose just two out of hundreds of ETFs, which ones would I select? My first choice is the S&P 500 Plus. Although it is a basic index that may seem a bit less exciting than my usual preferences, I did not choose the Nasdaq because the volatility of the Nasdaq index is actually quite high. Enduring that volatility for 10, 20, or even 30 years is not easy, so I opted for the S&P 500 index. 

Now, what does TR mean? It stands for Total Return, which means that dividends do not exit the ETF; instead, they are automatically reinvested back into the ETF. The advantage of TR ETFs is that when you invest for the long term, the reinvestment effect from dividends accumulates through compound interest. Therefore, as 10, 20, or 30 years of data accumulates, you can achieve a significant additional return.

There are certainly ways to receive dividends separately and reinvest them, but I think it really comes down to personal preference. I find that a bit more bothersome, so I prefer TR ETFs a bit more. Additionally, one of the advantages of index investing is that the management fees are very low. 

Secondly, there are ETFs that invest in companies like Louis Vuitton, Prada, Gucci, and Ferrari. I chose these because I believe in the luxury goods industry positively in the long term. I'm sure many of you watching this will understand. Is there anyone among my viewers who dislikes luxury goods? But seriously, who truly hates luxury goods? There are people who say they earn a lot of money and yet insist they never buy luxury items, but where are those people?

I believe it doesn't exist, and that's why I like luxury ETFs. When people earn money, their consumption standards naturally rise. Once these standards are raised, it is really difficult to lower them. This is something anyone can relate to; it’s often said that it's hard to go from a big car to a small one or from a big house to a small one. The same psychology applies to luxury goods. I see it the same way, and I find the steady demand for luxury goods to be incredibly attractive. Furthermore, when the economy is good, the demand for luxury goods obviously increases. But when the economy is bad, does the demand for luxury goods drop significantly? Not really. When people face a slightly difficult economic situation, what do they do? They adjust their consumption patterns to buy a few less essential items instead.

Instead of buying five items, you can simply go to Daiso and solve your needs there, and then make one purchase of luxury goods. This is about making focused and selective consumption choices. Actual data shows that recently, as interest rates have sharply risen, consumer demand has weakened. However, the demand for luxury goods has not diminished. 

Secondly, the characteristic of luxury brands is that they do not emerge overnight. For example, if Samsung were to make handbags and put its logo on them, would that make them luxury goods? No, it would not. Luxury items require a story behind the brand, and it is impossible for other companies to create that story overnight. Therefore, a few luxury brands dominate the entire market, indicating that luxury is not simply about brand value.

The process of turning something into a luxury brand is not as simple as it sounds. There are very few luxury companies, and these few supply the entire market and capture all the demand. From an investor's perspective, this makes the industry and these companies incredibly attractive. Moreover, looking a bit further ahead, the number of people who buy and use luxury goods continues to grow. For example, in the past, China was not a country with a significant number of luxury consumers. However, as China's economy developed rapidly, it transformed into a huge market for luxury goods. The next countries to follow suit will be Vietnam, India, and Indonesia, as these nations gradually become consumers of luxury brands. Meanwhile, consumers in developed countries are not abandoning their demand for luxury goods; rather, this demand remains consistently strong.

The number of consumers is increasing. Therefore, I really like the luxury goods industry and see luxury companies as very attractive investment opportunities. One of the ETFs I invest in without hesitation is one that invests in luxury goods. By the way, there are probably only two in our country. Additionally, a characteristic of luxury companies is that most are based in European countries, which makes direct investment quite cumbersome. Thus, it is a type of investment where one has no choice but to opt for ETFs for more convenient trading. 

Now, if I were given only two options for investment today, I would choose the S&P 500 index as the first option and the luxury index as the second. This is, after all, my personal investment opinion, so I hope you can take this into consideration when making your investment decisions regarding ETFs.

I hope the content is helpful to you, and please like and subscribe.

평생 단 두개의 ETF에 투자를 해야한다면?

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평생 단 두개의 ETF에 투자를 해야한다면?

평생 단 두개의 ETF에 투자를 해야한다면?

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