John Lee, head of John Lee's Rich School. [YouTube 'Saemeos TV' screenshot]
John Lee, head of John Lee's Rich School. [YouTube 'Saemeos TV' screenshot]

John Lee, a financial expert and head of John Lee's Rich School, said investors should focus on consistent long-term investment rather than chasing short-term returns. He particularly recommended using ETFs to build wealth over time when opening an investment account in a newborn's name.

A video titled "What you must know if you're investing retirement funds in shares — the goal of investment is not returns" was released Wednesday on the YouTube channel Saemeos TV.

In the video, Lee answered a range of questions from investors and said investing in "time" matters far more than seeking short-term gains through leveraged products.

A woman in her mid-60s asked for advice, saying she wanted to start investing in shares but did not know what to study.

Lee said the root of the problem appeared to be a lack of financial education, noting that many people in their 20s and 30s had put money into leveraged products.

"It's because of the desire to get rich quickly," he said. "You absolutely cannot get rich quickly. You have to invest in time."

For investors in their mid-60s, he said the proportion allocated to shares should be decided carefully given the relatively limited investment horizon, and advised against putting money into leveraged products.

'Time is a child's greatest asset' — ETFs recommended for newborn accounts

Asked what shares to buy when opening an investment account in a newborn's name, Lee named "time" as the child's most valuable asset.

"The greatest asset this child has is time," he said. "It is also a good idea to open an account in the child's name and buy shares instead of giving pocket money."

He recommended ETFs as the investment product of choice. "The best option is an ETF," he said, citing the S&P 500 ETF, which invests in 500 leading US companies, and the KOSPI 200 ETF, which invests in Korean companies. He said investors could put money into both products or split their assets between them.

When asked whether it was acceptable to put all retirement pension funds into an S&P 500 ETF, Lee drew a line at investing 100 percent in US assets.

"Putting 100 percent into the US alone is not a good idea," he said. "I think it is also good to invest in Korea."

'The goal of investment is not returns' — retirement preparation is the point

The point Lee returned to repeatedly was that investors must be clear about their purpose rather than fixating on short-term returns.

"Why do you invest in shares? To prepare for retirement," he said. "Share investment is not a returns game." He added that investors who put in a fixed amount every month need not view a falling share price as entirely bad, since the same amount of money buys more shares when prices are lower.

He also strongly cautioned against the habit of checking share prices every day and buying and selling based on short-term swings.

"If you buy 100 shares and then stare at your phone every day, that is gambling," Lee said. "Gambling and investment are different." He went on to say that investors should think of themselves not as "traders" who buy and sell daily, but as "investors" who take a long-term view of a company's growth potential.

Rather than watching whether foreign investors are buying or selling on a given day, or how much a share price moved, he said investors should ask whether the companies they hold are continuing to make money and whether those companies can sustain their competitiveness over the long term.

Lump sum or installments? 'It depends on the person'

Asked whether it is better to invest a lump sum in an ETF all at once or to spread it out in installments, Lee said the answer depends on the investor's temperament.

He said investors who would find it psychologically difficult to hold on if the market dropped sharply right after a lump-sum investment could reasonably choose to spread their money across multiple purchases. However, he added that in terms of expected long-term returns alone, investing a lump sum all at once tends to come out slightly ahead.

Ultimately, the investment principle Lee consistently emphasized is to be clear about the purpose of investing, make full use of time, and build assets steadily — rather than riding the highs and lows of short-term returns.

"The best time to invest is today," he said, urging those who have been hesitating to open an account and start preparing for retirement over the long term.


betterj@heraldcorp.com