Allocate 40% to overseas stocks, lower return expectations, buy in tranches: expert [Herald Money Festa 2026]

Woori Investment Securities' Choi Ji-sun speaks at Herald Money Festa 2026

Recommends 40% in US big tech, autonomous driving and robotics

Domestic stocks at 20%, with ETFs favored over individual picks

Bonds 20%, pension assets 10%, cash 10%

Choi Ji-sun, a director at Woori Investment Securities' Gangnam Financial Center, delivers a lecture titled "Easy Financial Investment: Building Your Own Portfolio" at Herald Money Festa 2026, held at Dongdaemun Design Plaza in Jung-gu, Seoul, on Saturday. [Photo by Lim Se-jun]

"The current market is maintaining an upward trend, but investors need to lower their return expectations. I think it will be difficult to see a repeat of the momentum we saw at the start of this year."

Choi Ji-sun, a director at Woori Investment Securities' Gangnam Financial Center, made the remarks Saturday while delivering a lecture titled "Easy Financial Investment: Building Your Own Portfolio" at Herald Money Festa 2026, held at Art Hall 1 of Dongdaemun Design Plaza.

Choi proposed a portfolio strategy for navigating heightened market volatility: allocate 40% to overseas stocks, 20% to domestic stocks, 20% to bonds and interest rate products, 10% to pension assets and 10% to cash — buying in tranches on every dip.

She viewed the recent market correction not as a sign that the AI growth cycle has peaked, but as a process of unwinding the excessive leverage and positions that had built up in the market.

"What the market wants to know is whether AI will last and whether it will keep generating profits — and the answer hinges on AI's return on investment," Choi said. "The key question is whether it can turn a profit after covering actual funding costs." She added that while economic conditions and corporate earnings remain solid, elevated interest rates, oil prices and geopolitical risks such as war are keeping volatility high. "It makes sense to lower return expectations and respond to corrections through tranche buying," she said.

Reflecting that market outlook, Choi assigned the largest share of the portfolio — 40% — to overseas stocks, centering the strategy on US big tech and innovative companies in AI, autonomous driving and robotics.

"When I look at tolerable volatility and long-term growth potential, I think the United States is currently the most suitable investment destination," she said. "Earnings per share among US-listed companies are beating expectations across every industry sector, and upward earnings revisions are not limited to AI alone."

On investment approach, Choi recommended accumulating positions gradually rather than buying all at once. "I advise against buying in a lump sum — instead, divide purchases into thirds or quarters," she said. "Another option is to buy overseas stocks regularly each month when your paycheck comes in."

She mentioned Alphabet, Amazon, Tesla, Nvidia and Apple as specific names to consider. However, Choi cautioned that "now is not the time to buy simply on dreams and hopes for future industries," stressing that investors "should buy companies that are actually posting sales and operating profit."

For domestic stocks, she recommended allocating 20% but favoring ETFs over individual picks.

"When the Kospi was around the 2,500 level last year, there was less hesitation in picking individual names like Samsung Electronics, SK hynix and Hyundai Motor," she said. "With the index having risen as much as it has now, I think it makes more sense to capture broad themes and trends through ETFs rather than individual stocks."

In a sideways market, she also suggested covered-call ETFs as an alternative, noting that they allow investors to collect monthly distributions while still seeking additional gains from share price appreciation. However, she added that they "are not a product that provides 100% protection against share price declines."

Choi allocated 20% to bonds and interest rate products. Given lingering uncertainty over long-term interest rates, she recommended focusing on short-term bonds rather than long-duration debt.

"Looking at current economic conditions and inflation trends, it makes sense to maintain a conservative stance," she said. "With long-term interest rate uncertainty still present, I think it is right to keep positions centered on short-term bonds." She said won-denominated investors could use government and high-grade corporate bonds, while dollar holders could consider dollar repurchase agreements and short-term US government bonds.

Pension assets received a baseline allocation of 10%. For investors uncomfortable with a 40% overseas stock weighting, she offered an alternative: reduce overseas stocks from 40% to 30% and increase pension assets to 20%.

"I think pension assets should be given greater weight because they align with a long-term investment perspective," Choi said, recommending that investors build assets over time through personal pension plans, individual retirement pension accounts and defined-contribution retirement pension schemes.

The final 10% is cash. According to Choi, cash serves as dry powder for additional purchases when share prices fall. She therefore suggested raising the cash allocation to between 20% and 30% when market conditions deteriorate.

rim@heraldcorp.com