Thanks to the new market opening policy, foreigners can now invest directly in companies listed on Korean Stock Exchange.
Unlike in the past, foreigners can now buy stocks in Korea through brokerage firms located both in Korea and overseas.
Looking forward to the market opening policy carried out by the government, a lot of people are becoming more interested in investing in Korean companies.
How To Invest In Korean Stocks?
Investing in Korean stocks might sound hard, but in reality, it’s not. There are four steps to invest in Korean stocks:
Step 1. Register at a brokerage firm in Korea or overseas.
Step 2. Buy stocks of the listed company through your broker.
Step 3. Sell them when they reach a price that you can make a healthy profit on
Step 4. Take out the money and cash it out through another bank account, transfer to your own country, pay taxes there and keep the remaining profit
The easiest way is to buy ETFs. Most Korean companies can be accessed through the ETF market, and this can also minimize your risk.
I have been investing in Korean stocks for the last 3 years through the market opening process.
I can assure you that this can be a nice investment for foreign investors who can not only make money but learn more about Korean companies, financial markets, and industries as well.
However, it is still a newly emerging field, so do make sure to research before investing.
If you can speak Korean or at least have someone to help you out, I would highly recommend going that route as the online brokerage can be a bit slow.
Where can you find information on which companies are listed?
You can find the latest stock market news by visiting: https://global.krx.co.kr/main/main.jsp or any other source such as the Korea Herald.
The Pros and Cons of Investing in Korea
Here below are some pros and cons of investing in Korean stocks or companies.
- Investment can also spread your risk and diversify your portfolio by investing overseas.
- The market can provide great opportunities for those seeking to get their money back as they can invest when there are moments of market downfalls that can target only companies that can provide a great return.
- The Korean market can be cheaper compared to other Asian markets such as Japan and Hong Kong.
- As most Koreans are still skeptical about the new market opening policy, it can be hard to find information about some companies.
- Investing can also take a lot of time and effort. This can be especially true because of the language barrier that can make it harder for foreigners in Korea to invest without help from a Korean native who can understand what’s going on.
- Investing can also be risky as the companies can always fail and can cause you to lose your investment.
Can You Day Trade in Korea?
Yes, the stock market was opened to day trading for foreigners and it can now be carried out on Korean Stock Exchange.
Day-trading can bring you high returns but can also entail greater risks than other methods of investing.
If you can get a crash course in day-trading, it can help you become more knowledgeable about the market and can provide a good return for your investment.
Here are some tips for day trading:
- Research a company before investing in it. You can do so by visiting their website or financial news sites.
- Make sure you can figure out if they can really provide a good return and can assure you that your investment can grow well in case something happens to it.
- Always make sure that you can monitor the company closely and can also sell it easily if needed.
- Try not to invest in only one company. By doing so, your investment can be diversified, which can lower risks.
All in all, can foreigners buy stocks in Korea can be a great investment for anyone looking for good returns and can also provide you with the knowledge that can help you become more familiar with the Korean market.
It can be more profitable than investing in other Asian stock markets, but it can also have more risks because of the still-developing nature of the country.