The valuation of South Korea’s stock market is compelling and an exchange traded fund (ETF) can give you diversified exposure. Amidst the recent bull market, the KOPSI Index is selling at 15.5 times this year’s earnings, a valuation that fares well with 19 times in Indonesia, 24 for India, and in the 50s for China. Jeremy Siegel for Yahoo Personal Finance reports that the country is far from what it looked like in 1998 when the Asian economic crisis spread from South Asia to Korea. Korean stocks now have a valuation above $1 trillion. The won is strong and the Korean stock market has grown tenfold.

The country is currently at a fork in the road, and it’s aging quicker than the U.S. and the fertility rate, at 1.2, rivals Japan’s for being the lowest in the world. Geopolitical risk looms with the North and South division, with a potential to reunite in the future. Korea’s manufacturing is being pressed by cheap labor in China and to achieve economic success, Seoul must re-train foreign-educated students to make their mark in Korea. Korea’s greatest resource is its people, who are highly educated and motivated. iShares MSCI South Korea Index (EWY) will give good exposure to this country in the world market.


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.