00486 October 5, 2024

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Over the long run, the market only rises

Clubhouse: relaxed conversations about investing, CLEC Investment and Financial Management Channel, October 5, 2024

Market volatility has nothing to do with me!

• Market volatility has nothing to do with me!

• International affairs have nothing to do with me!

• Market analysis has nothing to do with me!

• Financial statements have nothing to do with me!

• Economic conditions have nothing to do with me!

• None of it has anything to do with me!

• Ignore the noise and turbulence of the market!

Investing blindly without learning is dangerous

• Watch our videos and ask specific questions, including:

• The video number and the timestamp where the question came up.

• Asking questions after watching the video is the most effective way to learn.

CLEC has no discussion groups, and we have not authorized anyone to act on our behalf

• We cannot know the membership or purpose of any group, and such groups can easily be infiltrated by people with bad intentions.

The investments we mainly recommend are the Nasdaq 100 index fund QQQ and the corresponding local ETFs issued in each country

• Do not rely entirely on financial consultants, including Charles Schwab financial consultants. They can help with account opening, but we do not recommend fully adopting the ETFs or other financial products they suggest.

• Over the long term, the Nasdaq 100 index fund and the S&P 500 index fund have been among the best-performing investments. Outside of these, individual stocks, funds, and financial products usually do not help investment success and should be avoided.

We recommend investing 100% in a Nasdaq 100 index fund.

United States: We recommend buying QQQ, or QQQM for smaller accounts. Cash can be placed in money market fund SWVXX or short-term Treasury bill ETFs BIL and SGOV.

Taiwan investors: We recommend Fubon NASDAQ 00662. Cash can be invested in CTBC U.S. Government 0-1 Year Bond ETF Fund (00864B.TW).

China investors: We recommend 513100/513300/160213/159941/161130/159660.

Hong Kong investors: You can choose HKD 3086, USD 9086, ETF 2834 (HKD), or 9834 (USD).

Canada investors: We recommend converting to U.S. dollars and buying QQQ directly, or investing in Canadian-dollar products QQC.TO/ETF (HXQ.TO).

Australia investors: We recommend buying NDQ.

United Kingdom investors: We recommend the U.S.-dollar-denominated iShares VII Public Limited Company - iShares NASDAQ 100 UCITS ETF (CNDX.L). In Europe, we recommend EQQQ and CSPX.L.

Brazil: The recently launched Nasdaq index fund is NASD11.

Japan investors: You can choose 2568/1545/2631.

Malaysia and Singapore investors: You can purchase U.S. QQQ through a Phillip Securities POEMS Cash Plus trading account.

South Korea: The recommended QQQ ETFs are 368590.KS/133690.KS/367380.KS.

Since 2018, we have kept all videos on YouTube so everyone can learn investing in chronological order

• The videos reflect the market conditions and appropriate investment decisions at the time. As time changes, some strategies may no longer apply. They remain valuable learning resources.

• Viewers should interpret each video in the context of the market conditions at that time, and develop their own thinking and judgment.

• Our early investment recommendations included certain individual stocks and regular funds. Although they were good choices at the time, suitable investments must also account for personal risk tolerance and investment strategy.

Investors are always extremely optimistic!

Investors always face the sunshine!

The market will ultimately rise!

Investing requires patience!

Wealth is worth waiting for!

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The market will keep rising forever; it only rises and never falls

Teacher James

• Hello, A-shares opened on the 8th. Can I use my 10-year reserve fund (the Nasdaq assets will not be sold even if they don’t move) to hedge A-shares? Then I can make 10 points and run away.

• I listened to your course on September 28th and you also recognized China’s policies.

• A lot of people are betting on A-shares recently, and I’m also a little itchy, but I’m not sure whether it will last for how long it will rise or whether it will go bad if it falls after I buy it.

• But I feel that it has gone up a lot and doesn’t seem to be that valuable anymore.

• I don’t know what you think?

It seems you still do not fully understand investing. People who only want to make a quick score are in great danger!

• China's financial and fiscal policies have done a good job this time in line with international standards. In particular, they have combined the financial and fiscal policies of the United States and Japan to launch financial and fiscal policies that are more suitable for China. I hold a positive view.

• However, it is still not recommended to invest in the Chinese stock market rashly. The Chinese stock market, like the U.S. stock market in 1930, the Taiwan stock market and the Japanese stock market in 1990, all experienced 30-year bottoms during this period.

• Every market has a boyhood and youth period before it matures. China's market should still need time to become a mature market before it can steadily grow.

• Let’s look at whether China is worth investing in thirty years later. But thirty years from now, you will have already made 100 times the profit in U.S. index funds, and you will not look down on the Chinese market. Just as Taiwan and Japanese stocks are rising well now, people who have invested in the United States for thirty years will not be tempted by the current Taiwanese and Japanese stocks.

The era of monetary easing will begin in 2024

Enter the quantitative easing QE era in 2009. It rose from March 2009 to the end of 2021 due to interest rate hikes. It rose nearly 12 times in 2013, with an annualized return of 21%.

Now we are ushering in another monetary easing. This time it is not as violent as the quantitative easing in 2009, so it will not rise as violently as in 2009. However, because it is an interest rate cut cycle, this bull market may be a slow bull, much like the 1980 rise to a 37-fold rise in two thousand years.

The annualized return is 19.7%.

How Household Wealth Breaks Down - TheStreet

• U.S. Net Worth:

How Household Wealth Breaks Down - TheStreet

• https://www.thestreet.com/pers onal - finance/net - worth - household - wealth - composition

Asset class: Taiwan (percent) vs. United States (percent)

Table 1

Asset Class Taiwan (Percent) United States (Percent)

• Main differences:

• 1. Real estate: Taiwan and the United States have similar asset allocation ratios in real estate, about 28.1% 28.5% 28%.
• 2. Deposits: Taiwanese households allocate a relatively large proportion of their assets to deposits (24%), with deposits ranging from 24.0% to 8.1%, compared with only 8.1% in the United States.
• 3. Life insurance and pension reserves: American households have pension reserves of up to 34.1% and life insurance and retirement insurance reserves of 19.7% and only 4.6%. American households’ allocation of pension reserves is much higher than that of Taiwan’s life insurance and retirement reserves, 19.7%.
• 4. Equity and securities: The allocation ratio of domestic equity and securities in Taiwan and the United States is equivalent to 4.6% of life insurance and annuity, which is about 11-12%. Taiwan also contains 3.5% of foreign securities, while the United States does not clearly differentiate. Most of the U.S. pension reserves are invested in equity and securities, so the proportion of equity and securities in the U.S.'s domestic pension reserves of 34.1% should be nearly 46%.

Domestic equity and ownership 11.4% 11.9%

• 5. Other assets: The United States has a higher asset allocation (including corporate equities, bonds, etc.) in the "other" category, at 17.4%, while Taiwan's is 13.3%. securities

• If the equity, marketable securities corporate equity and bonds are totaled: Taiwan is 28.2%; the United States is as high as 63.4. Taiwan is less than half the size of the United States. Foreign securities 3.5% N/A

• This table shows the different orientations of Taiwan and the United States in asset allocation. Taiwan focuses on cash and others (corporate equity 13.3% 17.4% deposits and real estate, while the United States pays more attention to the allocation of marketable securities and equity securities assets, bonds, etc.)

This also shows why U.S. capital markets are developed and why funding for innovation keeps flowing

• American households with developed capitalism have pension reserves of up to 34.1%; equity and securities 11.9%; corporate equity, bonds, etc. 17.4%; and total liquid assets, which contribute the most to social progress, are marketable securities as high as 63.4%.

• On the other hand, most of the assets in Taiwan and emerging countries in general are real estate (28.1%), cash (24%), and insurance (19.7%) that will not produce social progress. More than 71.8% of the assets cannot produce substantial social growth value. On the contrary, liquid assets of securities and equity assets that can promote social progress only account for less than 30% (28.2%) of assets.

What’s even more ridiculous is that Taiwan’s primary school textbooks teach children to buy a house quickly when housing prices fall, and then sell them to earn the price difference when prices rise.

• "Hanlin Publishing House's social studies textbook for sixth grade elementary school actually contains words such as "Real estate can also be used as a financial management tool." When house prices and land prices are low, buy houses or land, and then sell them when the prices rise to make profits. "

Trying to avoid major declines by swing trading will make you pay a painful price!

• In the 20 years from 1995 to 2014, as long as the 10 days with the largest increases are missed, the annual return will drop from 9.8% to 6.1%. As long as you miss the 30 days when the price rises the most, it is worse than a fixed deposit, and it is equivalent to 20 years of wasted work.

• Don’t think that 30 days is a lot. There are 7,300 days in 20 years. These 30 days only account for 0.4% of the investment period.

• You could have earned 65,000 yuan by just leaving it alone, with an annualized return of 9.8%. However, because you wanted to predict the high and low points of buying and selling, you missed the 0.4% period. As a result, you only have 10,000 yuan left, less than one-sixth of the original, and the return is worse than that of a fixed deposit.

• You may think that it is so easy to miss the days when prices rise the most. This statistical example is too extreme.

• One thing I didn’t tell you is that, interestingly, 6 of the 10 days with the biggest rises occurred within two weeks immediately after the biggest slump. That is, the stock market’s big rises and big slumps usually occur very close to each other.

CLEC Investment and Financial Management Education Academy 00451, "2024" First Investment Class: An Investment Life Lecture Worth 100 Million Yuan, December 29, 2023, CLEC Investment and Financial Management Channel https://youtu.be/4FMjmyBpTzw

It is wonderful and joyful when the market rises every day

We have a pinned comment in the YouTube comments area where you can download handouts and find other related links.

Or email me at [email protected] or [email protected].