Korean Stock Market Poised to Outperform U.S., Potential to Surpass 5,000 Points in 2024
SEOUL – The Korean stock market is predicted to experience stronger growth than itS U.S. counterpart in the coming year,with potential to break thru the 5,000-point mark,according to Kim Doo-hyun,a leading investment strategist. The forecast comes as the U.S. market’s rapid ascent is expected to moderate, prompting a shift towards diversification and undervalued assets.
Kim, speaking to The Korea Economic Daily, highlighted the strong fundamentals of Korean semiconductor companies like Samsung Electronics and SK Hynix, stating they are “companies that will generate operating profits of close to 100 trillion won next year, but are still cheap.” He anticipates a broader rally driven by the semiconductor sector, predicting that “conductors will also rise strongly.” this positive outlook contrasts with a more cautious view of the U.S. market, where he expects gains in big tech to slow, leading investors to explore opportunities in sectors like biotechnology and value stocks.
The strategist emphasized the importance of diversification across both asset classes and geographies. While acknowledging the continued growth of the artificial intelligence (AI) industry, Kim cautioned against concentrating investments in a few select AI stocks, noting, “Of the numerous AI stocks, only one or two will survive, but the problem is that no one knows which companies will remain.” He believes investment appeal will shift from the U.S. to markets like Korea and Japan as the New York stock market’s growth slows, and anticipates stronger performance from thematic industries in China, specifically “China’s physical AI,” compared to the U.S.
In a volatile market surroundings characterized by persistently low interest rates and the diminished role of traditional safe havens like bonds and gold, Kim advocates for a diversified, long-term investment approach. He suggests a balanced strategy regarding exchange rate risk, recommending an equal mix of hedged and exposed positions. For long-term holdings like pension assets, he points to diversified investment products such as target date funds (TDFs), citing kiwoom Management’s recently launched ‘keyword Dream Dynamic TDF’ as an exmaple of a fund actively adjusting asset allocation based on market trends.
