Global Asset Management: South Korea Overview
Table of Contents
Global Asset Management – South Korea Overview
There are many reasons why Seoul, South Korea is a great location to do business.
Global Asset Management finds many advantages being based there.
In addition to having the world’s fastest internet speeds, they have one of the highest-educated workforces anywhere.
Student math and science scores are second only to Singapore, and they have a high literacy – over 95%.
Most people speak English.
Most importantly, the cultural attributes that have made the country an economic success also support GAM’s success.
Read more: What is Global Asset Management?
FAST FACTS
- Official Name: Republic of Korea (ROK)
- ROK: Han’guk – shortform of Taehan-min’guk
- Language: Korean (Hangul) is official language. Most people speak English.
- Government: Presidential Republic
- Population: 2019 estimate 51,709,098 (27th largest in the world by population)
- Geographic Size: 100,210 km²
- Capital City: Seoul, 10 million inhabitants
- Second Largest City: Busan, major port
- Economy: 11th largest economy by GDP.
- Life Expectancy: 3rd highest in the world, credited to high quality healthcare
- Local Landmark: Lotte World Tower in Seoul is 5th highest building in the world
- Ethnicity: 96% ethnic Koreans (one of the most ethnically homogeneous societies)
ECONOMY
South Korea is one of the 20th Century’s great economic success stories, growing from one of the poorest countries in the world into a member of the G20 with a GDP in excess of one trillion dollars.
Modern history begins following the 1950-1953 war with North Korea.
People were encouraged to save and invest, rather than consume, and the government directed resources towards export-oriented industries.
Confucian values, that still dominate the culture, made this possible.
There is an ethic of hard work and living a simple life.
This combination led to South Korea having the fastest growing middle class in the world for several decades.
Read more: Wealth Manager Explained
SOUTH KOREAN TIGER
Today, they are considered one of the four Asian Tiger Countries, along with Singapore, Hong Kong and Taiwan.
The Asian Tigers are high-growth economies fueled by rapid industrialization and exports.
As a group, they have enjoyed steady economic growth since the mid-1960s and now rank among the wealthiest countries.
South Korea and Taiwan evolved as essential manufacturing hubs for electronic parts, information technology and automobiles.
Singapore and Hong Kong grew into worldwide financial centers.
IMPORTS/EXPORTS
Today, South Korea boats the 11th largest global economy by nominal GDP.
South Korea’s main trading partners are China, the United States, Japan and Germany.
Major conglomerates include Samsung, LG Electronics, Hyundai and the Lotte Group.
Main exports are to China (25.1%), the United States (12.2%), Vietnam (8.2%), Hong Kong (6.9%) and Japan (4.7%).
hese include semiconductors, petrochemicals, wireless communication equipment, cars and auto parts, flat displays, ships and steel.
Imports come from China (20.5%), Japan (11.5%), the United States (10.5%), Germany (4.2%) and Saudi Arabia (4.1%).
The largest commodity imports are crude oil & petroleum products, natural gas, coal and steel.
Manufactured goods include semiconductors, computers, wireless communication equipment, automobiles, textiles and chemicals.
CONFUCIAN INFLUENCE
Modern Confucianism in South Korea is more a template for society than a religion.
Korean Confucianism is a major influence and a fundamental part of society.
The values imbued contribute to a great workforce, a growing economy and a stable social order.
Respect for education is a vital part of South Korean culture; the emphasis is placed on an ability to study and to memorize.
The focus on family and the group over the individual, along with respect for elders, translates into a people that thrive in a corporate structure.
CONFUCIOUS AT WORK
Confucianism supports group harmony, hierarchies and traditions.
Maintaining ‘kibun’ (face, honor and personal dignity) is important.
Businesses built on Confucian ethics instill harmonious relationships among workers and company loyalty.
Punctuality is highly valued and an essential sign of respect.
Efficient and time-oriented workers make decisions and complete tasks quickly.
Western societies focus on diversity and inclusion.
Korean culture focuses on a sense of belonging.
This involves developing deeper personal connections and harmonious relationships.
The corporate culture focuses on what employees have in common, rather on what their differences are.
NUNCHI
“Nunchi” literally translates to “eye-measure”.
It is close to the western notion of emotional intelligence.
Nunchi is the art of sensing what people are thinking and feeling in order to respond appropriately.
It’s been described as “speed-reading a room with the emphasis on the collective, not on specific individuals”.
This Korean concept was introduced 2,500 years ago as a teaching of Confucius and is credited with the modern economic miracle.
On a global scale, Nunchi explains the country’s ability to determine the needs of other countries, to manufacture exports to meet those needs and to continually adjust as those needs change.
This awareness also helps people function well in the workplace.
It gives Global Asset Management local staff a special ability to work with both a diverse expatriate staff and a global clientele.
It brings harmony to the GAM Seoul office.
Global Asset Management FAQ
How do I get started investing?
You get started investing by finding an investment advisor to work with, opening an investment account, then establishing a personal investment plan based on your financial goals and risk tolerance.
What is global asset management?
Global asset management refers to overseeing the entirety of a client’s worldwide investments. This is done by a financial institution or an individual. It involves a wide range of wealth management services and products, including both traditional and alternative investments.
How do I manage risk in my investment portfolio?
The first step in portfolio risk management is diversification. Don’t put all your eggs in one basket. Other steps include avoiding leverage, complicated derivatives and buying blue chip stocks and bonds.
Why is diversification important for investing?
The goal of diversification is to maximize gains, minimize risk and smooth out volatility. Stocks are diversified by investing in different sectors of the market, that perform differently at various points in economic and market cycles.
Why should I invest in stocks?
Over the long term, stocks provide the highest rates of return. Investors need growth to ensure that their capital grows more than inflation. When interest rates are low, dividend stocks provide higher yields than bonds.
What types of stocks are best for growth?
Growth stocks are often in new industries or businesses involved in major societal changes, and expect to have higher than average revenues and/or profits. They often pay no dividend, since management invests returns back into the company.
What are the best investments for income?
Investors looking for income should consider a mixture of bonds, GICs, and stocks with higher dividends. Bank stocks, real estate investment trusts and utility companies traditionally pay higher than average dividends.
What do I do if the market drops a lot?
When the stock market has a large drop, the first thing to do is nothing. Avoid panic selling. If there is excess cash in a portfolio, this is an opportunity to buy stock at lower prices.
What are the best stock market sectors to invest in?
It is best to invest in a variety of sectors and have a diversified portfolio. Most well established portfolios will include the financial sector, the gold and precious metals sector, technology and industrials. Different sectors will perform well at different points in the market cycle.
Is it better to buy stocks or mutual funds?
Mutual funds provide instant diversification for young and new investors who don’t have enough money to diversify into at least five different stocks. Otherwise direct stock ownership is better, due to the excessive costs involved in most mutual funds.
What is an IPO?
And IPO is an initial public offering. It can refer to the process of changing ownership of a company from private to publicly traded. It also refers to buying shares in that company right before it starts trading.
