<Anchor> It
is a friendly economy time.
Today (11th), I will be with reporter Kwon Ae-ri.
Interest rates have gone up a lot lately.
At the same time, there must be a lot of people who are thinking about where to invest, but lately, there seems to be a lot of talk about investing in bonds.
<Reporter>
Yes.
I'm still very unfamiliar with bonds, but since I hear a lot about it, there are many people who are curious about it, so I'm going to talk about it today.
Over the past year, when interest rates have risen sharply, the net purchase of bonds by Korean individual investors has exceeded 20 trillion won.
Just a year ago, it was about 4.5 trillion won.
That's an increase of nearly five times.
If there was a lot of stock in 2020 and 21, last year it wouldn't be too wrong even if it was bonds.
If it is a bond, it may seem difficult for nothing, but how about an IOU?
A bond is just an IOU.
However, it is just an IOU written by a place much bigger than an individual.
When large institutions such as the country, banks, and companies need money, they issue IOUs, or bonds, to borrow and repay large sums of money.
When interest rates rise, the interest on this IOU also rises.
However, these places are generally trustworthy enough to be incomparable to individuals.
So, I think that the person who bought the bond can buy and sell this IOU without necessarily holding it until maturity.
That's why bond transactions happen.
Originally, a lot of institutions do.
In fact, the bond market is much bigger than the stock market, and now many individuals in Korea are starting to jump into it.
It is now possible to buy and sell bonds as easily as stocks in securities companies' apps.
<Anchor>
Now, relatively, looking at what has been known so far, it is safe even if the rate of return may be slightly lower than that of stocks.
It's known a little bit like this.
So, is this really as safe as a bank deposit?
<Reporter>
In the asset market, it is classified as a safe asset, but it cannot be considered as safe as a bank deposit.
Bank deposits are protected by law, but bonds are an investment, so even if the company you invested in bonds later says it has no money, the law will not return your money.
Bonds have a promised interest rate and a maturity date.
If you hold it until maturity, you can get back the principal and interest just like a deposit.
As long as the issuer is still alive and well.
Investing in bonds, however, is usually meant to be bought and sold just like stocks.
From this point on, it is easier to think of real estate rather than savings. There is an officetel with monthly rent, but if the price has risen a lot, then you might think about selling it.
Bonds are the same.
Prices rise and fall until expiration.
However, if interest rates continue to rise in the future, the new bonds will say that they will pay better interest than the bonds I own.
But, like stock dividends, bonds usually pay interest on a regular basis.
Now I want to stop receiving interest and sell my bonds, and then others will do the same.
The attractiveness of existing bonds is bound to diminish.
So, when interest rates rise, the price of existing bonds falls.
When the price drops, the person who buys it at that time can receive a higher interest than the promised interest, so there will be people who buy it.
Conversely, when interest rates go down, bond prices go up.
<Anchor>
That's right.
So, here's what I'm most curious about.
It won't be easy, but are individual investors worth investing in bonds at this point?
<Reporter>
First of all, experts say that it is a good time to invest in bonds these days because the general outlook is that interest rates will not rise much more this year.
If that happens, bond yields now will be quite high in the future.
Interest is good.
However, if interest rates actually go down later, the price of the existing bond will go up, so there will be an opportunity to sell it and make a profit.
However, if it doesn't work as a general observatory now, or it fluctuates back and forth.
Then, the individual investor who was unfamiliar with bonds but tried it would be very upset.
Still, it pays interest and is a bit more investment than bank deposits, so if you want to try it, you'd better start with very good bonds.
For example, government bonds issued by the country, government bonds of corporations, or bonds of very strong corporations, these things.
And stocks, rather than buying individual stocks, just eat a lot of ETFs that follow stock indices.
I don't get far from stock investment, but I choose it a lot when I want to go a little more stable.
Bonds are also ETFs.
There are as many different combinations as stock ETFs.
Individual investments are burdensome, but if you are interested, it wouldn't be bad to think about ETFs.
[Sin-eol/Sangsang Certificate Research Center Investment Strategy Team Leader: The end of monetary policy is imminent, not the end of the tightening stance of monetary policy.
The key to bond investing is stability.
If volatility still persists, it is better to focus on government and public bonds , and
it
seems appropriate to find products suitable for your investment, centering on high-quality corporate bonds with high stability.]
Although it is classified as a less risky safe asset, it is still an investment, so it is better to approach it a little conservatively.
I might be able to organize it like this.