Translation to English

“Korea’s super wealthy primarily sticking to real estate... Need for more bold investments in stocks”

Ji-young Park for Maeil Business Newspaper
October 5, 2020

"Even if you're rich now, after the third generation, only 10% of your wealth remains. There are many reasons, such as failing to invest, paying a lot of taxes, losing wealth, etc. There are ways to preserve your wealth. You have to invest. For example, if you only leave your money in deposits, in 20 years inflation will surpass you and your wealth will be halved.”

On the 16th of last month, Ohad Topor, chairman of TCK Investments, made this statement at the ‘Investment Trends of the Super Rich, and Leading Companies’ session at the 21st World Knowledge Forum held at the Shilla Hotel in Seoul. TCK Investments, a global investment company operating in Seoul and London, was co-founded by Ohad Topor and Howard Marks and began its operations in 2012. It provides customized wealth management services for HNWIs, entrepreneurs, and corporations. 

In the session ‘Investment Trends of the Super Rich, and Leading Companies’, there was a discussion on what stance investors should take at a time where there is a US-China conflict and how Covid-19 has increased uncertainty in the global economy. In this session, Chairman Topo, Young-Key Hwang, Senior Advisor of TCK Investments and Chairman of the Korea-America Association, and Minki Synn, Co-CEO of TCK Investments served as the speaker, and Mark Tetto, Partner and Managing Director of TCK Investments, served as the Moderator.

Speakers cited an active stock investment as a way to successfully maintain wealth. Chairman Topor said, "If you invest only in specific assets such as real estate, it will be more difficult to build wealth in the long-run because you are making investments in only certain assets. You have to invest in the financial and capital markets. Korea's super-rich mainly invest in real estate. However, it is necessary to invest in financial assets and have a portfolio to generate good returns." In fact, according to the data presented during the session, real estate is currently selected as the highest investment asses class in Korea. In Korea, 73% of wealth is devoted to real estate, whereas in the United States and Taiwan, this ratio is at 23% and 30%, respectively.

"If you had invested in stocks in the 1900s, the returns would be reached 47,000 times. If you had invested in bonds, you could have seen a yield of 293 times. During this period, inflation has grown over 929 times" explained Mr. Topor.

Chairman Topo said, "The stock market fell very quickly and recovered sharply in the Covid-19 phase. If a quick recovery is possible, we can make a profit." If the Covid-19 vaccine is made, the real economy will recover rapidly, and it allow the US and other advanced countries to prepare a fiscal stimulus package. Given the recovery rate from the shock from the Covid-19 crisis, you can see that it has rebounded by about 60% from the lowest point. Given that historically the average rebound was 108%, a rebound in the stock market is expected for the remainder of the future."

The speakers emphasized paying attention to the global market and the stock markets. Young-Key Hwang, Senior Advisor of TCK Investments said, "If you want to become the smartest investor in the world, you need to expand your views globally. The growth rate of the global stock market is much healthier than the Korean stock market and the real estate market." “Apple and Amazon weren’t great companies 10 years ago. Even today, there are many companies in the US and UK with creative business models,” he said.