Korean retail investors in US stocks suffer as won strengthens
Hong, a woman in her 30s living in Seoul, is having second thoughts about her U.S. stock investments. "I increased the share of U.S. stocks in my portfolio about two months ago because the Korean market was doing poorly. But the stronger won has left my returns below expectations. I'm not sure whether to sell or just hold the stocks for the long term," she said. Hong is not alone. The won's…
Korean retail investors who have invested in U.S. stocks are facing challenges as the won strengthens against the dollar. A woman in her 30s, living in Seoul, is reconsidering her investment strategy. She had increased her U.S. stock allocation in her portfolio a couple of months ago because the Korean market was performing poorly. However, the stronger won has resulted in her returns falling short of her expectations. Hong is uncertain whether to sell her stocks or hold onto them for the long term.
The recent strengthening of the won against the dollar has impacted many Korean retail investors holding U.S. stocks. The currency losses have canceled out some of the gains in their stock investments. The won-dollar exchange rate closed at 1,339.2 won per dollar on Thursday, a significant drop from the 1,550-won range seen two months ago. This change has occurred after a series of declines over several weeks.
Even when U.S. stocks perform well, the strengthening won can still lead to reduced returns for Korean investors. For instance, a 20% gain on a U.S. stock would only result in a 4% return for a Korean investor if the won depreciates by around 14%. This currency fluctuation has prompted some investors to contemplate selling their U.S. stocks as the won continues to strengthen.
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- Korean retail investors in US stocks suffer as won strengthens koreatimes.co.kr
