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- Hacker News
- I would be really interested to learn what the default advice for retail investors is across countries.
In Germany the consensus is MSCI World or FTSE All-World ETFs.
I believe in the US most advice goes to VTSAX (US Total Market), VOO (S&P500) and maybe QQQ (NASDAQ100) which means only US stocks.
What gets recommended in other countries?
by oezi - It’s just gambling, not investing.
- For a second, it appeared some found out.
https://www.reutersconnect.com/item/south-korean-retail-inve...
But it seems there's still a lot in their FA phase in the FAFO cycle.
by chanux - The problem isn't leveraged funds, it's margin on leveraged funds.
Leveraged funds are the safest way for the average investor to get access to leverage because unlike margin there is no risk of margin calls, and your money generally won't go to zero unlike options which are vastly more complicated and can expire.
The reality is that using leveraged funds (or any leverage) is a completely rational move because the average person will never retire wealthy unless they're already making a tech salary or similar.
Investing has always been gambling, even Warren Buffet made his biggest early wins on all-in bets.
by mkotlikov - "Smart men go broke three ways: liquor, ladies, and leverage." -- Charlie Munger
(Which is not to imply that these are smart men).
by bananamogul - As a Korean, the reason people rush into stocks is simple: labor value has been completely destroyed.
Realistically, it's nearly impossible for high income young people in their 20s and 30s to buy a house in Seoul. That forces them to move to the provinces, but then there's almost no infrastructure. No companies either.
So many people turn to leverage in hopes of a life changing reversal.
The recent rise in the KOSPI index happened because some of the loopholes that Korean conglomerates used to make inheritance easier were blocked by revisions to the Commercial Act. One of the uncertainties that had been called 'Korean risk' was removed, and the market went up.
For a Korean man, the moment you leave Seoul, not just the outskirts, but out of Seoul entirely, there's no one to talk to about IT jobs. I live outside Seoul, and the infrastructure gap is about 10 to 20 years behind. On top of that, there are no IT companies, just mostly low income manual labor jobs.
The median monthly income for Korean men is about 3 million KRW, while the average Seoul apartment price is 1.3 billion KRW and the median price is 997 million KRW. That means you'd need to work for about 25~30 years just to buy a home, but job tenure is getting shorter, so that's not realistic.
So people gamble on leverage, hoping for a life changing win. Everyone around me knows it's gambling, but they figure they're already in a dead end situation anyway, so they have nothing to lose.
I live and work in IT outside Seoul, but the IT business has already matured, and there are many well established companies. The Korean market itself is small, so early movers have already taken the lead. There's no room for latecomers like me. That's why I take on work from the West, China, and Japan regardless, but even that's hard without a reputation.
The moment you leave Seoul, a Korean's chances of success drop to nearly zero. That's why people cling to the city so desperately.
And honestly, I've hardly gambled on my life. But I'm drowning in debt, and sometimes I feel like a fool for working so hard.
by jdw64 - The story we were telling young people that if they apply themselves, go to school and get a job they'll be able to afford family, house, vacations is moving further and further away for more and more people.
The turn towards financial nihilism will continue.
by raziel2701 - For those who don't know what's going on in Korea, KOSPI is up 3x in the last year and a large amount of HBM employees have made huge amounts of bonus pay. This has led to an insane FOMO frenzy in a society that's already very competitive.
Add to that, stock gains in Korea are often used to finance housing purchases (or real estate investment) so many retail investors are scared of being "locked out" of housing (which is a requisite status symbol for dating or marriage) if they're not making the same capital gains others are.
Currently Korean social media is full of stories of leveraged day traders who've gotten rich the past year, HBM employees who've made bonuses worth decades of salary (e.g. memes of Samsung employees in luxury cars), etc. Lots of comments along the lines of "everyone is getting rich except me". It's all reminiscent of the crypto frenzy in the US a few years ago but way more intense and concentrated.
by x313