Stocks, Gold See Highest Profitability This Decade

The average profitability of Korean stocks and equity funds over the 3-year period were three times higher than that of fixed deposits over the past decade, a Dong-A Ilbo report said Wednesday.

The biggest shocks to the Korean stock market this century have been the IT crash early in the decade, the Sept. 11 terrorist attacks on the U.S. in 2001, the credit card crisis of 2003, and the global financial crisis that erupted last year.

Strong economic fundamentals and the boom cycle of the global economy, however, have made stocks the most promising investment item.

Dong-A and Mirae Asset Securities analyzed the profitability of investment items from January 2000 through October this year based on data from the Korea Exchange, the Bank of Korea, and Kookmin Bank.

The items include domestic stocks, stocks of Brazil, Russia, India and China (BRIC), domestic bonds, fixed deposits, gold, real estate nationwide and in the southern district of Seoul, and U.S. dollars.

The earning rate of equity funds deferred for three years was 13.4 percent, meaning the average expected profitability of equity funds was more than 13 percent. By contrast, the profitability of fixed deposits over the same period was 4.9 percent.

Among the items, the profitability of BRIC funds was the highest with 19 percent, followed by gold with 16.6 percent, and real estate in the southern part of Seoul with 10.6 percent.

The profitability of real estate nationwide was 5.9 percent, higher than that of bonds (5.5 percent) and fixed deposits.

jarrett@donga.com