00490 November 2, 2024

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No class next Saturday (11/09)

• The following Saturday (11/16) is the daylight saving time that has resumed classes at 6am in the United States! Taiwan still maintains 10 p.m.

Over the long run, the market only rises

Clubhouse: relaxed conversations about investing, CLEC Investment and Financial Management Channel, November 2, 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!

Subscribe, comment, like, forward, and share on Apple Podcasts. Remember to leave a five-star subscription so you can receive real-time market updates.

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

No class next Saturday (11/09)

• The following Saturday (11/16) is the daylight saving time that has resumed classes at 6am in the United States! Taiwan still maintains 10 p.m.

With an annual salary of US$250,000, buying a house in the United States is difficult, or rather very tight

• Even if a couple earns $500,000 per year, it is still difficult to buy a house. After buying a house, you will accidentally end up poor for the rest of your life.

• Because an average house in the Bay Area costs three million U.S. dollars (of course you can also buy an apartment for about half the price.), the down payment is $500,000, and the loan is $2.5 million. The loan interest rate is 6.5%, and the monthly loan repayment amount is $15,638, which is as high as $187,656 a year. It takes $187,656 a year after tax, and an annual salary of $310,000 before tax is needed to pay for a house purchase loan.

• With an annual salary of $500,000, after deducting $310,000 to buy a house, there is 190,000 left before tax and 114,000 after tax. US$9,500 a month is enough to live on. Can you be rich if you can't save money to invest at all?

• So homebuyers in the United States will likely be poor for their entire lives.

Money is an IOU that depreciates because the borrower keeps borrowing without limit. Of course this IOU will lose value

• Stocks are assets that will increase in value.

• Use your time and hard work to receive currency (garbage) that will depreciate. Exchange the currency (garbage) that will depreciate into assets, which is super powerful finance.

• Ordinary people trade their lives for garbage and deposit it in the bank like treasure. The result is a pile of rubbish in life. To put it bluntly, workers are just garbage collectors.

• Capitalists exchange garbage for assets, never sell the assets, and always borrow garbage to spend without having to pay it back. Even if they have to pay it back, they will borrow garbage to pay back. Never sell your own assets.

Because you still have a job, your employment income should cover living expenses, the mortgage, and the car loan

• Credit loans, house loans, car loans, these loans have nothing to do with the rise and fall of stocks. Your house loan and car loan should be repaid with your stable cash flow, or you can repay them with pledged loans. This is a stable cash flow. (When pledging, pay attention to safe pledge asset allocation.)

• Because you still have a job, your income from work should be able to cover living expenses, housing loan, and car loan.

• If your salary cannot be paid, you can use up to 2% of your investment assets to make up for the shortfall. If it is still insufficient, there is a risk.

Retirees with no income can consider the following options

• Retired and have mortgage and other installment payments:

• Option 1.

• If you have retired and have no income, and your pension is 50 times your annual expenses, you can use 2% a year. Then, in addition to living expenses, this 2% annual expenses will also have to repay the loan and installments.

• That is, your annual expenses must be able to include these repayments.

• For example, if you originally expected to spend 100,000 a month on a house loan of 40,000 and a car loan of 20,000, then you would spend 40,000 a month on your own, so you would need 100,000 a month. Your retirement expenses are 1.2 million a year, which is 50 times the annual expenses. Then your retirement investment assets will be 60 million, and you can only spend 40,000 a month.

Option 2: Pay off all mortgage and car loans

• After that, the 60 million will be used to pay off the 9 million for the housing loan and the car loan, leaving 51 million, and then use 80% 4080 to invest 00662 20% 10.2 million to invest 00864B. Rebalance annually.

• You can use 2% of 51 million every year, which means you can spend 1.02 million a year. You can spend 85,000 a month.

• If the loan of 9 million yuan is repaid in 15 years, the interest is 3%, and the monthly payment is 60,000 yuan.

• If you don't pay off the mortgage and car loan, and use 2% on 60 million, you can spend 1.2 million a year, and 100,000 a month to spend, but you still have to pay 60,000 for the mortgage and car loan, so you only have 40,000 to spend a month.

• If you pay off 9 million in mortgage and car loans, you will have 85,000 in expenses. Before paying off the mortgage and car loan, I can only spend 40,000 yuan a month. This is why we recommend paying off all mortgage and car loans during retirement.

Figure 4.6 Three-year rolling correlation between the S&P 500 Index and international stocks (MSCI Europe, Australia and Far East Index [MSCI- EAFE])

• Many U.S. investors also consider investing in international stocks as a way to diversify their investments.

• But for investors investing in international stocks, the following news is even more chilling. Even at the beginning of the study period, the correlation between U.S. and international stocks was uniformly positive, and over the past few decades, the correlation between the two has risen to close to 1.0. In other words, international stocks no longer seem to provide any value in diversifying investment risk (Figure 4.6).

• Figure 4.6 Three-year rolling correlation between the S&P 500 Index and international stocks (MSCI Europe, Australia and Far East Index [MSCI-EAFE])

Investment assets of NT$45 million. There is no need to withdraw from assets; my suggestions are as follows

• Risk and risk tolerance are the first things that come to mind when we discuss investment asset allocation. Although you do not need to withdraw money from the assets, the asset allocation may drop by 70%, and if you have pledges, you will be under great pressure. If you do not pledge, then no matter how the market falls, it has nothing to do with you. This should be kept in mind.

• Asset allocation 1. No pledge, use 80% 36 million to invest in 00662, and 20% 9 million to invest in 00864B. Rebalance annually.

• Asset Allocation 2. Because you have your husband as your backer, if you have emergency financial needs and your husband can assist you, you can also consider investing 100% in 00662 without leaving an emergency reserve fund.

• I don’t think you need to use the asset allocation of leveraged funds, which is too complicated, because you don’t need to withdraw money from investment assets, and you won’t pledge to borrow money, so just use a simple asset allocation.

Question 2. Should assets be arranged with 80% invested in QQQ and 20% kept as cash reserves?

• James replied: Europe can have twice leveraged funds, yours should be 60% EQQQ, 20% twice leveraged funds, and 20% money market funds.

This way beta 1.0 is more efficient. 80% EQQQ 20% cash, beta 0.8, relatively inefficient and low performance.

• • European double leverage QQQ I found the code (the code is different exchanges: .PA France; MI Milan, Italy; .F Frankfurt Exchange; DE should be Germany!) LQQ.PA; LQQ.MI; L817.F;

L817.DE

Europe can invest in the following money markets

• LVNAV in Euros

• Euro Liquidity Fund

• https://www.morganstanley.com/im/en-ie/intermediary-investor/funds-and-performance/morgan-stanley-liquidity-funds/euro-liquidity-fund.html

• LVNAV in GBP

• Sterling Liquidity Fund

• https://www.morganstanley.com/im/en-gb/intermediary-investor/funds-and-performance/morgan-stanley-liquidity-funds/sterling-liquidity-fund.html

• LVNAV USD denominated

• US Dollar Liquidity Fund

• https://www.morganstanley.com/im/en-ie/intermediary-investor/funds-and-performance/morgan-stanley-liquidity-funds/us-dollar-liquidity-fund.html

Cash means the principal must not be lost; only then can it be treated as cash

• SPHD fell 23.5% from 49.61 in April 2022 to a low of 37.91 in October 2023

• SPHD dropped from 43.42 in February 2022 to 3-25.38 in March 2020 by 41.5%

• If you need emergency capital, and if all the stocks you have pledged have fallen so much, what will you use to live on and support your stock pledged loan assets?

• So always remember that cash is to be placed in money market funds or T-Bills shorter than one year.

• In a general taxable account, because we will not need this fund often, it is just an emergency reserve, so we can put it in BOXX. BOXX will not issue dividends, so there is no need to pay taxes. If you need to sell in the future, it will only be capital gains tax. Capital gains tax is more economical than income tax. Of course, your income is not much and the marginal tax rate is within 15%. Of course, you can buy other money market funds and short-term T-Bill Treasury bonds shorter than one year.

• Other money market funds include SWVXX and T-Bill Treasury bills shorter than one year such as BIL; SGOV; BOXX;00864B

• Retirement accounts have no tax issues, so the above BIL; SWVXX; SGOV; BOXX targets can be invested.

The train has been moving while you remain on the platform. What is the use of waiting?

• I felt that everyone kept asking questions at the station but refused to get on the train. I really wanted to kick them into the train. I wish I had the strength of Hercules to drive all the people on the platform into the train.

• The cars have been moving and you have been on the platform. What's the use of waiting.

[Who needs smart rebalancing, and how should it be done?]

• Smart rebalancing is only needed by investors with leveraged funds.

• Those who can invest in leveraged funds:

• 1. If you have income before retirement, there is no need to use money from investment assets.
• 2. People who have pledged loans and can borrow money from the pledged account.

• People who are retired or have no income and need to withdraw money from investment assets cannot invest in leveraged funds.

• If you fit the above group of people, hold leveraged funds and do smart rebalancing, as explained in the following article:

• https://docs.google.com/file/d/1T882J-WuW-p5EzUgZN_IET_8aNtOsgwS/edit?usp=docslist_api&filetype=msword

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:

• [email protected]

• [email protected]