[Yonhap News] 사진 확대 [Yonhap News]

If you invested 1 million won each in stocks of Samsung Electronics and SK Hynix ahead of Chuseok last year, how much would it have been now. Assuming that stocks were bought on a weekly basis and the remaining cash was stored, Samsung Electronics had about 3.16 million won and SK Hynix had about 3.93 million won. During the same period, the amount simply calculated with an annual deposit rate of 2.50% is about 1.02 million won.

According to the Korea Exchange on the 27th, the KOSPI also doubled while the two stocks made large valuation gains.

However, the high rate of return does not mean that the money has increased stably throughout the holding period. SK Hynix was also pushed back by more than 58% from its intraday high this year.

Based on the closing price of the regular market on the 23rd, the investment performance from October 2, the trading day just before the Chuseok holiday last year, was calculated. The principal amount was 1 million won each, and it was assumed that additional stocks were not bought or sold in the middle. Stocks were combined with the valuation of the holdings and the remaining cash, and deposits were calculated at a rate of 2.50% per annum in time for the period. All are on a pre-tax basis and do not reflect stock dividends and transaction costs.

Samsung Electronics’ closing price on October 2 last year was 89,000 won. At that time, buying 11 common shares with 1 million won would cost 979,000 won and leave 21,000 won in cash. SK Hynix’s closing price on the same day was 395,500 won.

On the 23rd of this month, Samsung Electronics’ closing price is 285,500 won. The valuation of 11 shares held is 3,140,500 won, and the remaining cash is 3,161,500 won. The return is 216.15%, up 2.161,500 won from the principal.

SK Hynix was able to buy two weeks with 1 million won just before Chuseok last year. They spend 791,000 won on stock purchases and have 209,000 won in cash left.

If the closing price of 1.862 million won is added on the 23rd, the two-week valuation is 3,724,000 won. The combined amount of cash was 3.93 million won, up 2.93 million won from the principal. The rate of return is 293.3%.

This is different from the rate of increase of the stock price itself. During the same period, Samsung Electronics shares rose about 220.8 percent and SK Hynix rose about 370.8 percent. In this calculation, it is assumed that there is no interest on the money left after buying stocks. In particular, SK Hynix left 20.9% of its principal in cash, so the overall return on principal was lower than the stock price increase rate.

Deposits were based on the comparison of 2.50 percent of commercial banks per year. If this interest rate is applied and calculated as a single interest rate that 1 million won was operated for 356 days from October 2nd last year to September 23rd this year, the pre-tax interest is about 24,384 won. This is the amount divided by 365 days after multiplying the principal by the annual interest rate and the number of days of operation, and the total amount of principal is about 1,024,384 won.

However, this does not mean the money you receive when you sign up for a specific deposit and cancel it on the 23rd. One-year deposits are still before maturity, so a separate interest rate will be applied if they are canceled in the middle. The pre-tax interest when a year is filled at 2.50% per year is 25,000 won.

While the two stocks made large valuation gains, the KOSPI also doubled. However, this is the result of the case of purchasing and continuing to hold it just before Chuseok last year, and investment performance varies depending on the timing of the purchase or sale.

An official from the financial investment industry advised, “Deposits can receive contracted interest, but stocks’ profits or losses are determined by the timing of the sale,” adding, “We should look at future performance and current stock price levels rather than investing in past growth rates.”