[머니콕] As the Kospi, which had been in a strong rally at the beginning of the year, has gone up and down sharply in recent years, concerns of Donghak ants are growing. Maeil Economic Daily met with Mr. Kim Young-bin, CEO of Fount Kim Young-bin,’the number one investor in the domestic robo-advisor’s asset allocation, and asked how to lower investment risk while pursuing a satisfactory rate of return. Kim, who graduated from Seoul National University’s Department of Economics with the highest honors, is famous for meeting Jim Rogers, one of the top three global investors, while traveling around the world on a motorcycle while in college. Rogers participated as an angel investor when CEO Kim left the Boston Consulting Group (BCG) and founded the startup Fount, and is currently working as an official advisor.
CEO Kim emphasized that because money is difficult to recover once lost, it is more important to’protect investment’ rather than aiming for high returns at once. . The RoboAdvisor asset allocation solution that Pound has been servicing since 2015 has been generating stable revenues of around 8% every year. The rate of return is four times higher than that of a savings bank’s term deposit product (2% per year), which has relatively high deposit rates. He pointed out that stocks and real estate are necessarily upward in the mid to long term due to economic growth and inflation, but in the case of bitcoin, a cryptocurrency that has recently been attracting attention, it is still necessary to approach it carefully.
The following is the full text of the interview.
In the era of zero interest rates, investment is essential, not optional
Q. When I think of Youngbin Kim, the first person that comes to mind is Jim Rogers. How did you meet and did it lead to investment?
A. When I was a college student, I took a reckless challenge to ride a motorcycle around the globe. In the process, I met advisor Jim Rogers by chance, and the relationship that started out by coincidence continued, so I became the first angel investor when I was founded, and as a formal advisor, the relationship continues until now.
Q. Five or six robo-advisors started competing five years ago. What’s the secret to the Pound’s lead?
A. The biggest secret is that our company focused only on technology. Startups don’t have enough resources, but at first, we were focused on organizations rather than individuals. Our current clients, Samsung Life Insurance, global top-tier insurance companies, MetLife, and Woori Bank, such large financial companies, did not need our design excellence, nor did we need to do marketing or publicity. We have focused purely on how outstanding artificial intelligence technology is, how numerous assets are allocated and operated stably. While we’re making a lot of it, the pound isn’t known much. It is now known as the company is growing in size and entering into business-to-consumer transactions (B2C). Focusing only on technology in the beginning seems to have been the driving force behind the coming so far.
Q. Younger generations in 2030 are jumping into stock investments with so-called’young-eul’. How do you evaluate this phenomenon?
A. It seems to be a survival instinct. Too many things have changed in the 20s and 30s now. The financial paradigm has changed. In the past, you had to buy a house and pay off the loan. Even if they couldn’t make financial income, those who worked diligently earned the national pension and did not have a long time to live after retirement. When I retired in my 60s, my life expectancy was around 70. But now, 2030 generations have to live in the age of 100, and the retirement period is almost the same as in the past. After retirement, spending has almost tripled, but income is about the same level. More importantly, the environment in which financial income can be obtained is much worse. This is the era when deposit rates are zero. There was a time in the past when bank rates gave 15%. This was a ridiculously high level, four times the principal amount in 10 years. Today’s 20s and 30s are clever and live in an era where survival is not guaranteed without investment. So, I think this is not a desire, but a survival instinct.
‘Investment to protect’ is more important than aiming for oriental medicine
Q. Young people are greedy for high profits because they have less seed money. Why do they need multi-asset asset management?
A. Investments must be made with what you know. And you must make an investment that you keep. This is because once money is lost, it is difficult to recover. The financial environment is difficult and labor income cannot be doubled or tripled. In this situation, you have to make a punctual investment. Warren Buffett said the same thing. “The first principle of investing is to keep, the second principle is to keep, and the third principle is to remember the first principle again.” Sticky investments require investing in assets that rise in the long run. You have to invest in assets where time makes money. For example, the gap between the won and the dollar is not constantly widening. It’s not the right investment to continue investing in dollars over 20-30 years. Real estate makes money in the long run because of inflation. Another is to have this (investment asset) distributed. Multi-asset is also talking about this flow. It is an easy expression of asset allocation, which means’not to put eggs in one basket’. I often think that buying multiple assets is asset management, but when I buy 20 different KOSDAQ stocks, they fall together. This is not an asset allocation. Allocating and investing in assets with different movements is the standard of investment.
Q. It seems to be more persuasive to show results directly than words. Show your investment over the past 5 years.
A. The products that Pound mainly invest are index-type products such as ETFs. This is because we are thinking of an investment portfolio that can last 100 years, not 10-20 years. We include several global indices and maximize stability by including bonds and alternative investments. In addition to stability, our technology is to generate more than a certain amount of profit and meaningful profit. In each crisis situation, our company did a quantum jump. When an unexpected variable such as Corona 19 broke out, we also fell out, but it fell less and recovery was faster. The time for our dramatic growth was after the corona broke out, and before that, when the financial market slumped a lot in the second half of 2018, the company grew a lot.
The average return on all our investment accounts is around 8% per year. The rate of return we promised to our customers was 4~8% per year, and we have been keeping it steadily. Assets under management are growing at the fastest pace in the industry, keeping assets stable in each crisis situation. It was 8.7% in Corona last year and 8.2% in the second year. You may think that 8% per year is not as high, but it is 3 to 5 percentage points higher than the average return on global asset allocation funds. All pension and fund customers who have invested in our company for more than 1 year have a positive return. P2P investments can be high-yielding, but with defaults, you can get less than a dime. If you invest in the long term, your chances of loss are inevitably reduced, and this is proven by the performance of existing customers.
Bitcoin investment, still cautious
Q. Recently, global institutional investors are also showing interest in Bitcoin. Should Bitcoin also be viewed as an asset allocation target?
A. Assets that need asset allocation are those with different movements. From that point of view, bitcoin’s movement tends to be more and more harmonious, but since it moves in a different direction from general indices, I think it is attractive enough to incorporate in terms of asset allocation. However, an important condition as an asset allocation product is to earn money as time passes, or to have a fundamental property of upward movement in the long term. The reason why the S&P500 or KOSPI rises is because the value of the companies in them increases. On the other hand, it is necessary to revisit whether the fundamental property of Bitcoin is going upward in the long term. I think the possibility of incorporation is open if they fully understand those attributes. However, institutions are still cautious, and neither are we.
Q. Lastly, I would like any advice for young adults or beginners interested in investing.
A. I think it’s good for young people to invest aggressively with the idea that they can lose some of their assets, but in fact, I think that many of them should be managed. If you put money in the bank, you are definitely losing money. This is because in the long run, it is an interest rate situation that cannot keep up with inflation. You can enjoy economic freedom only by making financial income while making investments that protect your entire fortune.
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