August 19, 2017, 06:28:48 PM


Author Topic: Investing your money, in Korea  (Read 38703 times)

Offline SuperDoodle23

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Re: Investing your money, in Korea
« Reply #160 on: April 20, 2017, 03:09:30 PM »
Ptolemy, do you think it will be worthwhile to do some day trading on a site like Ameritrade with $500 or $ 1000 or would I just be spinning my wheels? The fees are 6.95 a pop so it would eat into profits if I did a lot of trading.

Offline teacher1988

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Re: Investing your money, in Korea
« Reply #161 on: April 20, 2017, 03:59:30 PM »
Errr.... Wow dude just don't do it. If you are really confident that you can beat the market, fine; I have my own reservations about frequent trading but that's ultimately up to you.

But just look at the math and you'll see how hard you're going to have it at a $1000 bankroll. $6.95 on a buy and sell? That's $13.9.

Even at your maximum tolerance of risk, you need to average 1.39% or more on every play you ever make to just break even.
Ptolemy is talking about swing trading which will see bigger ups and downs than day trading but even then gaining 1.39% on the average play is hard.

Offline SuperDoodle23

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Re: Investing your money, in Korea
« Reply #162 on: April 20, 2017, 04:08:29 PM »
Errr.... Wow dude just don't do it. If you are really confident that you can beat the market, fine; I have my own reservations about frequent trading but that's ultimately up to you.

But just look at the math and you'll see how hard you're going to have it at a $1000 bankroll. $6.95 on a buy and sell? That's $13.9.

Even at your maximum tolerance of risk, you need to average 1.39% or more on every play you ever make to just break even.
Ptolemy is talking about swing trading which will see bigger ups and downs than day trading but even then gaining 1.39% on the average play is hard.

Thanks for the advice. What type of investing would you consider a better fit for a noob such as myself?

Offline kobayashi

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Re: Investing your money, in Korea
« Reply #163 on: April 20, 2017, 04:32:49 PM »
What type of investing would you consider a better fit for a noob such as myself?

i told you the answer to this earlier in the thread.

Offline Pecan

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Re: Investing your money, in Korea
« Reply #164 on: April 20, 2017, 04:34:11 PM »
Errr.... Wow dude just don't do it. If you are really confident that you can beat the market, fine; I have my own reservations about frequent trading but that's ultimately up to you.

But just look at the math and you'll see how hard you're going to have it at a $1000 bankroll. $6.95 on a buy and sell? That's $13.9.

Even at your maximum tolerance of risk, you need to average 1.39% or more on every play you ever make to just break even.
Ptolemy is talking about swing trading which will see bigger ups and downs than day trading but even then gaining 1.39% on the average play is hard.

Thanks for the advice. What type of investing would you consider a better fit for a noob such as myself?
Calling what you are considering doing is NOT investing.  It is called gambling (AKA pissing your money away).

A better fit might be Walkerhill Casino.

Offline SuperDoodle23

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Re: Investing your money, in Korea
« Reply #165 on: April 20, 2017, 04:39:30 PM »
What type of investing would you consider a better fit for a noob such as myself?

i told you the answer to this earlier in the thread.

Yes.  You will have to excuse me from wanting the opinions from other people besides you. Thanks for contributing and if you don't mind I will hear about what other people suggest. Is that okay with you?

Offline SuperDoodle23

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Re: Investing your money, in Korea
« Reply #166 on: April 20, 2017, 04:41:21 PM »
Errr.... Wow dude just don't do it. If you are really confident that you can beat the market, fine; I have my own reservations about frequent trading but that's ultimately up to you.

But just look at the math and you'll see how hard you're going to have it at a $1000 bankroll. $6.95 on a buy and sell? That's $13.9.

Even at your maximum tolerance of risk, you need to average 1.39% or more on every play you ever make to just break even.
Ptolemy is talking about swing trading which will see bigger ups and downs than day trading but even then gaining 1.39% on the average play is hard.

Thanks for the advice. What type of investing would you consider a better fit for a noob such as myself?
Calling what you are considering doing is NOT investing.  It is called gambling (AKA pissing your money away).

A better fit might be Walkerhill Casino.

 The rake is too high at Walkerhill.

Offline jffjp

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Re: Investing your money, in Korea
« Reply #167 on: April 20, 2017, 04:48:27 PM »
What type of investing would you consider a better fit for a noob such as myself?

i told you the answer to this earlier in the thread.

Yes.  You will have to excuse me from wanting the opinions from other people besides you. Thanks for contributing and if you don't mind I will hear about what other people suggest. Is that okay with you?

So polite  :laugh: :laugh:

Offline teacher1988

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Re: Investing your money, in Korea
« Reply #168 on: April 20, 2017, 06:01:35 PM »
Thanks for the advice. What type of investing would you consider a better fit for a noob such as myself?

kobayashi's advice about index investing is pretty spot on already. His suggestion to read up on Andrew Hallam is great since Hallam writes about investing particularly for expats.

I personally follow couch potato investing and FIRE principles. There's too much to go into here but I'll try to break it down into one (small <-- yea right) post.

Couch potato investing is basically invest in --low cost-- INDEX FUNDS. A fund is basically a group of people pool their money together and buys a bunch of stuff with it. Index funds follow a particular index. You've probably heard of the NYSE index. Well look for "VTI", that one tries to follow the NYSE index as closely as possible. I digress, so these kinds of investors invest in low cost index funds and then leave it there. They prefer to buy, then hold it basically until they die. They will not buy very often. The most often you will see couch potato investors buying is probably once a month at most, but more likely they will buy anywhere from 1-4 times a year. They do this to reduce the costs of buying.

Why is this strategy good? Couch potato investors believe that the total value of the stock markets always goes up in the long run, so they just buy something that tracks the total stock market. "But what if I had bought at the peak of the 2008 financial crisis?" Doesn't matter, you'll find that you'll almost have doubled your money by now. Seriously, learn how to download the data into an excel, learn to use excel, then run the numbers yourself. You'll find the numbers have almost doubled (last time I checked). This is assuming you're even unlucky enough to have unloaded all your cash and bought at the very peak of the 2008 crisis.
If you go way back to the very beginning of when they started tracking these indices, you'll find that the total value of the stock market (in USA) has gone up by about 7-9% per year on average. So doubling at 2017 is actually quite average according to those numbers.
Indeed, even Warren Buffett and his teacher suggest that most people like you and me should follow this style of investing simply because we don't have the tools to beat the market consistently. Look for proof in Benjamin Graham's book "The Intelligent Investor." <-- Seriously go devour that book right now.

What are FIRE principles? (I might refer to FIRE principles as simply FIRE from now on)
FIRE stands for Financial Independence, Retiring Early. People who follow FIRE are mostly couch potato investors, but not always. However, that's not what sets FIRE people apart from everyone else. FIRE teaches people to increase the amount of money they save in comparison to their income. In simple math, it's how much money you've saved in one year, divided by your total income in that year. This is called the savings rate. The higher your savings rate, the faster you will reach FIRE. You'll see that FIRE people often save anywhere from 50%-80% of their income, and they invest all of their savings in index funds.
One can only increase their savings rate in two ways: 1) increase income and 2) decrease spending. Since 1) increase income is not entirely the easiest route for many people, many FIRE people choose to do 2) decrease spending.

With these two concepts combined you can basically invest your money periodically and sleep easy knowing that the stock market will always make you money in the long run (cross fingers on that statement). That and you don't have to stare at a bunch of charts all day; you live your life and do your hobbies. Personally, I have chosen this path because of that. Even if I were confident that I could day trade and beat the market (remember, less than 5% of people can do this), I'd be staring at a screen all day being stressed out about a miniscule percentage of a tick up or down. That wasn't the life I wanted.

Since you mention you're a noob I can probably write 20 pages about this topic easily but I'm going to give you some resources to read up on and let you decide what you want to do with your money and your life.

I'm a big redditor so bear with me on these links:

Some basics about investing here:
https://www.reddit.com/r/personalfinance/wiki/investing

Learn more about FIRE here:
https://www.reddit.com/r/financialindependence/

Day trading maniacs here:
https://www.reddit.com/r/wallstreetbets/

I would suggest you ask even more questions in these communities. You'd get better answers than here on waygook since most waygookers don't have an interest in finance whatsoever.
I would also suggest going to those subreddits' side bar (on the right) and look for the suggested books that they recommend. Read a bunch of those and decide what you want to do.

Again, if you do decide on going the day trading route, most books I've read suggest a minimum $20,000 bankroll, with 5x leverage to $100,000 trades at any time. This is to prevent the frequent trading fees from eating up any gains you can potentially get. So yes, your $1000 bankroll isn't even close to cutting it. Most self-proclaimed successful day traders I've read about have been anonymous posters online with no posted data on their trades, so it's hard to believe in the first place. But even assuming it's true, these guys say it took them something like three years of staring at a screen, just practicing the skill. If that's the life you want, go for it.

So in conclusion, what would I suggest you do?

TLDR: READ A BUNCH OF BOOKS AND CHOOSE THE ROUTE YOU WANT TO TAKE!

Good luck!

Offline SuperDoodle23

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Re: Investing your money, in Korea
« Reply #169 on: April 20, 2017, 06:11:12 PM »
Thanks so much for all of the great information teacher! I really appreciate all the details you put into the post. I have some pretty big student loan debt with varying interest rates. The toal amount is about 45k as of now. The highest interest rate is about 7% and the lowest is about 3%. About 20k of the loan is at the 7% rate and the rest is about 4%. The reason for the differences is because I took out different kinds of loans. I am thinking that it would be in my best interest to eliminate the loan with the 7% interest rate because anything I make from the market will be eaten up by that. Thoughts?

Offline teacher1988

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Re: Investing your money, in Korea
« Reply #170 on: April 20, 2017, 06:23:27 PM »
That would be the correct strategy. I suggest going to reddit r/personalfinance for a much more detailed answer since I'm more of a big picture rather than details guy. But yes, you have the right idea.

Offline Davey

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Re: Investing your money, in Korea
« Reply #171 on: April 21, 2017, 03:35:33 AM »
Thanks so much for all of the great information teacher! I really appreciate all the details you put into the post. I have some pretty big student loan debt with varying interest rates. The toal amount is about 45k as of now. The highest interest rate is about 7% and the lowest is about 3%. About 20k of the loan is at the 7% rate and the rest is about 4%. The reason for the differences is because I took out different kinds of loans. I am thinking that it would be in my best interest to eliminate the loan with the 7% interest rate because anything I make from the market will be eaten up by that. Thoughts?

Just focus on paying off your debt. Yes, attack the highest interest rate loan first.
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Offline Jgrat

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Re: Investing your money, in Korea
« Reply #172 on: April 21, 2017, 11:12:52 AM »
Thanks so much for all of the great information teacher! I really appreciate all the details you put into the post. I have some pretty big student loan debt with varying interest rates. The toal amount is about 45k as of now. The highest interest rate is about 7% and the lowest is about 3%. About 20k of the loan is at the 7% rate and the rest is about 4%. The reason for the differences is because I took out different kinds of loans. I am thinking that it would be in my best interest to eliminate the loan with the 7% interest rate because anything I make from the market will be eaten up by that. Thoughts?

You have a large portion of your debt as a percentage at the higher rate. I would look at consolidating all the loans to something lower. I would jump on that now before interest rates go up. This should lower your monthly payments, which means if you keep paying the same amount as you do now you'll actually be paying more off since your interest charges are reduced. Even if those 3-4% loans are lower there should be a happy middle ground in getting about 56% of your debt down to 5% or so. Without the exact numbers you'll have to do the math.

Offline insulimted

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Re: Anyone here invest in the stock market?
« Reply #173 on: April 21, 2017, 02:03:44 PM »
https://assetbuilder.com/knowledge-center/articles/american-brokerages-slam-the-door-on-us-expats

That is curious.

I read through Etrades FAQs and leagal documents and I didn’t see anything about expats not being allowed. His reason doesn’t really make sense to me because Etrade sends a tax document and I send it to the IRS. I could not send it to the IRS. But I could also not send it while living in the U.S. So what’s the difference?  I think he mean foreign based investment accounts. 

Offline insulimted

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Re: Investing your money, in Korea
« Reply #174 on: April 21, 2017, 02:06:52 PM »
I’ve been enjoying the youtube channel ‘Investors Archive’.

Here are a few fun facts:

Oriental Brewery is owned by Americans. Kind of funny because Obama’s PC America banned the use of the word ‘oriental’.

Also what is this law that there can only be two beer companies? Did the creators of that law envision one beer company being foreign owned? 

KKR Henry Kravis, “Korea has been a terrific market for us we have several investments in Korea the largest of which is Oriental Brewery. There are only two beer companies in Korea by law and by regulation”  https://youtu.be/s5tymE0_ve8?t=23m17s


This made me chuckle. I would love is someone published an article titled “White American Orientals improve on the Ondol”

KKR George Roberts speaking about Environmental, social and governance (ESG), “ I could go through many examples including a beer business in Korea where we changed the way the piping was done and the heating was done in the organization.”
https://youtu.be/wTk_lb9Z7zQ?t=11m48s

Offline Ptolemy

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Re: Investing your money, in Korea
« Reply #175 on: April 21, 2017, 05:54:03 PM »
We should define a couple things here...

For the vast majority of people, the best advice is just invest in a handful of ETFs, trickle new money into them over time, hold long term, and don't try to be smart. What people already said. That's because most people don't want to become experts at this stuff, they have other concerns, and even if they tried to become experts, this simple strategy might still outperform.

For a minority of people, beating markets is possible. Despite everyone saying "markets are so sophisticated and will take all your money" — financial markets are made up of brain dead idiots who couldn't out-think a lamp post. Most markets are big corporate money, desk job drones, who could care less about beating markets, just lemmings who do what everyone else does. Take a movie like The Big Short, those small hedge fund guys, those people exist and are playing the game of going opposite big dumb corporate money. That said, corporate dudes all worked at Goldman/Blackrock for a decade, so some guy off the street with zero experience will lose, but they are beatable...it's not like this impossible thing people make it out to be.

Ptolemy, do you think it will be worthwhile to do some day trading on a site like Ameritrade with $500 or $ 1000 or would I just be spinning my wheels? The fees are 6.95 a pop so it would eat into profits if I did a lot of trading.

I actually did that in 1996. I started a $2K Scottrade account and lost something like 33% in six months, and closed it down. I already figured that would happen, and the fees per trade make no sense at that volume. But it was an experiment I wanted to perform, and was worth the money, learned a lot about HOW I got beat (lack of formal education). Then I signed up the CFA program.

Offline gogators!

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Re: Investing your money, in Korea
« Reply #176 on: April 21, 2017, 10:11:00 PM »
Free advice, especially on the internet, is worth what you paid for it.

That said, if you're interested in investing, here's a good reading list: https://www.bogleheads.org/RecommendedReading.php

Offline slycordinator

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Re: Investing your money, in Korea
« Reply #177 on: April 21, 2017, 11:16:50 PM »
Oriental Brewery is owned by Americans. Kind of funny because Obama’s PC America banned the use of the word ‘oriental’.
The associations that oversee schools that teach traditional "Asian" medicine in the States and the licensing exams refer to theirself with "Oriental Medicine" in their names.

Offline Davey

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Re: Investing your money, in Korea
« Reply #178 on: April 22, 2017, 12:05:52 AM »
We should define a couple things here...

For the vast majority of people, the best advice is just invest in a handful of ETFs, trickle new money into them over time, hold long term, and don't try to be smart. What people already said. That's because most people don't want to become experts at this stuff, they have other concerns, and even if they tried to become experts, this simple strategy might still outperform.

For a minority of people, beating markets is possible. Despite everyone saying "markets are so sophisticated and will take all your money" — financial markets are made up of brain dead idiots who couldn't out-think a lamp post. Most markets are big corporate money, desk job drones, who could care less about beating markets, just lemmings who do what everyone else does. Take a movie like The Big Short, those small hedge fund guys, those people exist and are playing the game of going opposite big dumb corporate money. That said, corporate dudes all worked at Goldman/Blackrock for a decade, so some guy off the street with zero experience will lose, but they are beatable...it's not like this impossible thing people make it out to be.

Ptolemy, do you think it will be worthwhile to do some day trading on a site like Ameritrade with $500 or $ 1000 or would I just be spinning my wheels? The fees are 6.95 a pop so it would eat into profits if I did a lot of trading.

I actually did that in 1996. I started a $2K Scottrade account and lost something like 33% in six months, and closed it down. I already figured that would happen, and the fees per trade make no sense at that volume. But it was an experiment I wanted to perform, and was worth the money, learned a lot about HOW I got beat (lack of formal education). Then I signed up the CFA program.

I would argue a very small minority and very low probability.

E.g.,  sample 500,000 Canadian retail mutual fund investors consistently underperformed the market by an average 3% per year over the course of the last 15 years. The sample of 5,000 advisors did worse: 4% per year [1]

But, long-term investors who have quick access to broad range of macro and  micro information and interpret the info correctly have a better chance of beating the market [2,3]. Long-term investors with vast resources such as  pension funds have a better chance of beating the market because they have the resources to obtain immediate access to broad info, such as a Bloomberg terminal which costs like $10K PER QUARTER. But, you're not a pension fund with such resources so your chances of beating the market are even lower.

That said, actively invest if you have the time and if it's a hobby of yours; just keep in mind it's extremely unlikely you'll beat the market in the long-run. But, yes, it is not impossible. If active investing is just stressing you out, though, just let index funds do the work for you. As others have said, Warren Buffet  recommends just buying index funds.

[1]Linnainmaa, Melzer, and Previtera (2015), “Costly Investment Advice: Conflicts of Interest or Misguided Investment Beliefs?”

[2]Ambachtsheer (2014), “The Case for Long-Termism”

[3]Ambachtsheer  (2016) “The Future of Pension Management: Integrating Design, Governance, and Investing”.

« Last Edit: April 22, 2017, 02:36:12 AM by Davey »
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Offline Ptolemy

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Re: Investing your money, in Korea
« Reply #179 on: April 22, 2017, 02:08:00 AM »
E.g.,  sample 500,000 Canadian retail mutual fund investors consistently underperformed the market by an average 3% per year over the course of the last 15 years.

Right. And that is mathematically required...

The market participants are the market, so if the return of that market is 10%, the average return of a large group of investors is going to be somewhere under 10% because of trading costs, mutual fund fees, etc. The best a large sample like that could ever do would be 9%. We would need to see outlier stats.

 

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