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The KOSPI has tripled over a period of about 30 years, while the NASDAQ has risen to the 150s over a period of 305 years. Hello, this is Jaji Byeollo Mom, specializing in the Puddle Trading Method, leverage ETFs, and long-term investment. Today, I am making this video to compare domestic and US stocks, hoping that you will not lose the opportunity cost of domestic stocks and instead invest in US stocks, which offer a higher probability of success.
However, if you consistently record higher annual returns than the US NASDAQ index, then investing in domestic stocks is the right choice. But honestly, if your returns have been higher than the NASDAQ, I strongly recommend investing in US stocks. During the 5 or 10 years of long-term investment, where you hold onto a stock without selling, you will encounter countless joys and hardships.
Inflation, stagflation, interest rate hikes, the roles of the US and China, and so on— various negative factors will truly torment your long-term investment. You need conviction to hold onto that stock for * * years, no matter what happens. But even if you have that conviction now, will it be maintained next year?
Just look at Samsung Electronics; last year, we all shouted for a target of 100,000. I was no exception. I bought at 60,000 won and was looking toward the 11th. However, feeling that institutions and foreigners were intentionally shaking out retail investors, I lost confidence in Samsung Electronics and sold at 80,000 won.
If you are currently holding Samsung Electronics, are you still dancing hard even though it has dropped significantly, or are you watching and holding back because you feel anxious that it will fall further? Long-term investing will inevitably fail if you lose confidence. To provide that confidence, you must have the conviction that you will sell for more than the price you bought it for.
If you buy Samsung Electronics at 70,000 won right now, you must have the conviction that you can sell for at least 70,000 won more. For that conviction not to crumble, the stock price must trend upward. An upward trend in the stock price means that it will eventually break through the previous high.
If you are holding Samsung Electronics, you likely have the thought that it is trending upward and will break through the previous high. However, there is another important point here: the speed of the hunt. Will it take five years to break the previous high, or will it break it immediately in a few months or next year?
The upward trend Ultimately, speed is proportional to the speed at which it grows for us. I have a monthly chart for the KOSPI and myself spanning exactly about thirty years. Although the charts cover the same period, can you see at a glance that the chart flows are different? It ’s not for nothing that the KOSPI earned the nickname "Box P." It stayed in a box range for about 10 years, then rose once, spent another 10 years "taking advantage" of the box, and then gave one more rise to reach its current state.
The Nasdaq, having suffered a record-breaking crash and the "dot-com punishment," stands out and is drawing a steady upward trend. What is surprising about this chart is that the KOSPI has tripled over a period of about 30 years, while the NASDAQ has risen to the 150s over a period of 305 years. Is this difference a bait?
If you continue to invest in domestic stocks despite seeing this difference, in my personal opinion, it seems like you are wasting opportunity costs. There is a safer path with a higher probability of success, so do not deliberately choose the rough road. If you zoom in on the KOSPI chart, you can consider the red box range to be roughly 10 years.
And while there was a rise this time, what I am really worried about is... I know it's unlikely, but I do have some anxiety that it won't just sideways for another 10 years until 2030. On the other hand, if I look at Na Star's posts, except for the sharp spike during the dot-com bubble, it has been drawing a gradual upward trend.
Of course, if you are investing in the Arona style, there are major crashes like the recent Brothers, the US-China trade war, and COVID-19 on the charts where my mom and I gather. And holding through that is truly painful. However, I think it is much better than being stuck in the KOSPI. If a crash happens exactly once every 20 years, I am confident that I can continue dancing every month with conviction.
Of course, it is really painful to pick. No, even if you look at the SMP 500 chart, you can see that it is trending upward. There is a period of about 10 years of stagnation, similar to the KOSPI, due to the dot-com bubble and Brothers. Nevertheless, I made a profit investing in SLP 500 2x leverage SSO.
After the 2x leverage Quill, if I hold only one stock, my urges cannot be resisted... It is because I am looking at other stocks. Therefore, I am currently managing an independent long-term 2-year strategy using the "pond trading" method, considering a 7:3 ratio with the previously mentioned 2x leverage QLD (70 %) and SLP/Option E-commerce (30%) leverage SSO.
The reason you should invest in US stocks rather than domestic ones is that the US is the hegemonic power in global affairs. For the US to achieve hegemony, China must surpass it. However, looking at China's recent B-Tech regulations, it seems that beating the US will not be easy, no matter how much economic growth China achieves.
Therefore, we must invest in the US, the world's number one country that can freely release the dollar, the reserve currency. I actually want to strongly recommend US stock investment to you. Furthermore, the reason you should invest in US stocks rather than domestic ones is that countless global companies are concentrated in the US stock market, such as Apple, Microsoft, Amazon, Google, Facebook, and Tesla's Nvidia.
Moreover, there is a high probability that innovative and global companies that will change the world will continue to flock to the US in the future. That is why I [use] exactly 2x leverage, which allows you to increase your probability of success, have confidence, and boost your returns. I am investing in QQ for the long term, seeking higher returns than QQ.
Since the probability of encountering a massive crash increases as the investment period lengthens, I am investing in QQ D rather than 3x leveraged QQ for risk management. Two years ago, in 2019, there was news suggesting that Apple would soon overtake the KOSPI. It was a time when the market capitalization of a single stock—Apple, Google, and Amazon— exceeded the combined market capitalization of all companies listed on the KOSPI.
Two years after that news broke, Apple rose approximately twofold over the two years, surpassing the KOSPI. Even if you combine all the companies on the KOSPI, their market capitalization is smaller than that of Apple alone. Can you feel how small our stock market is? In the US, there are even companies like Microsoft, Google, and Amazon whose market caps are not significantly different from Apple's.
Unlike in Korea, it is not easy for retail investors to be "shaken out" if they decide to do so. In Korea, if institutions and foreign investors decide to manipulate the market and sell off their holdings, individual investors bear the brunt of the pain. If you try investing in US stocks, you will understand what it means to feel at ease and at peace.
You will go up, but you should invest in US stocks that are trending upward. To briefly compare US and domestic stocks, first is the dollar investment. Investing in US stocks also allows for dollar investment; with dollar investment, you can make a massive profit in dollars during an economic crisis.
If the timing of the currency exchange is good, you can even aim for a high return. Second is the difference between the US index and the domestic index. The US index shows a steady upward trend; if you watch YouTube or the news, you have likely heard phrases like "I'm going to hit a new hit" and " SMP 500." As I will mention in the video I upload tomorrow, the US index has a structure that makes it inevitable to trend upward.
The KOSPI also trends upward in the long run, but the pace of its development is too slow. Once it rises significantly, it shows price movements within a range for about 10 years. Ultimately, it is individual investors who suffer during that period. Finally, I mentioned that the market capitalization of Apple alone is larger than that of the entire KOSPI.
Aside from Apple, there are countless global companies such as Microsoft, Amazon, Google, Facebook, Tesla, and Nvidia. However, from my investment perspective, investing in domestic stocks I don't see any significant threats except for two stocks: Samsung Electronics, Kakao, and Naver. Two weeks ago, when the US stock market was undergoing a correction and causing widespread lamentation, I made a video explaining why the market didn't necessarily rebound.
Looking at the KOSPI and the Nasdaq recently, the NASDAQ also underwent a correction in September. However, as you can see on the screen, the speed of the rebound is incredibly strong. Before we knew it, the KOSPI had already reached a new high, and the NASDAQ Top and SFP 500 are close to their previous highs.
However, the KOSPI has been stuck in a continuous cycle of boredom and pain, and this is something that individual investors usually feel. Another point I want to emphasize is that even if you have gained confidence in US stocks, if Apple or Google were to trade sideways for a year, would we be able to continue accumulating steadily?
Netflix and Tesla have recently broken out of their long periods of consolidation and are rising; how many people would remain consistently small during such periods of sideways trading? That is why I recommend investing in KD, a 2x leverage NASDAQ-tracking fund, using the " puddle trading" method. I am determined to succeed in my 10-year long-term investment.
I want to show you how to execute a "kill deal" using the "puddle method" in long-term, dollar-cost averaging. I sincerely hope that after watching today's video, you will be inspired to invest in US stocks rather than domestic ones. In tomorrow's video, I plan to explain why US stocks are structured to be bound to trend upwards.
Have a great weekend everyone, and I look forward to seeing you in tomorrow's video.
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