00492 November 23, 2024

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Over the long run, the market only rises

Clubhouse: relaxed conversations about investing, CLEC Investment and Financial Management Channel, November 23, 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 solely on the advice of financial consultants, including Charles Schwab financial consultant. They can assist in opening an account, but it is not recommended to fully adopt the ETFs or other financial products they propose.

Over the long term, the Nasdaq 100 index fund and the S&P 500 index fund are the best-performing investments. Other than this, individual stocks, funds and financial products are usually not conducive to 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.

Malaysian and Singaporean citizens: You can purchase U.S. QQQ through 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

The Great Way Is Simple investment method - buying a house or renting and investing.xlsx

• @ChouDan

• According to the above case, the assumptions are 1. The annual rent increases by 2% (inflation rate), 2. The annualized return on housing growth is 5%, 3. All taxes and fees are not included, 4.00662 annualized return is 14% => Net assets after 30 years: 1. Buying a house = 17.29 million (net annualized return% = 4.33%) , 2. Rent + investment 00662 = 96.48 million (net annual return % = 10.49%). => Conclusion: After 30 years of buying a house, the net worth will be quite small, only slightly more than the inflation (leaving the old house). If the taxes and fees of condition 3. are added, it will be terrible.

• The most simple investment method - buying or renting a house investment.xlsx

• https://docs.google.com/file/d/1XSKaJkZsmqCB4ndhA847JMGw-z9n0LV_/edit?usp=docslist_api&filetype=msexcel

• https://ppt.cc/foZpRx

The Great Way Is Simple investment method - Buying or Renting a House Investment https://drive.google.com/file/d/19us-guUuZRmbgwrcQCAjNXJc3sbz2pjU/view?usp=drivesdk

Did I ask you to try to time your exits and exits? (Investment Rules) I am definitely not asking you to try to master the timing of entry and exit. First, as Professor Goetzman discovered, bubbles are rare, and the most dramatic price increases are not usually followed by sharp declines. In contrast, the best way to respond wisely to bubbles is to not take them seriously and to continue to hold a safe portfolio of stock index funds, which will automatically require you to sell some positions during the mania (follow our smart rebalancing and no-brainer rebalancing methods.).

• If you can adopt our safe and prudent portfolio, it will automatically require you to add stocks during panics and crashes; during rising stocks, we will try to accumulate our cash. Whether it's during a mania or a panic/crash, ignore what your talkative neighbor is telling you. Also, turn off CNBC, log off the Internet, and maintain your original investment rhythm and stay the course.

In addition, they may also be retirees with a cash burn rate of only 1%, or Buffett (Berkshire Hathaway invested 20% of its assets in treasury bills, and Buffett himself indirectly owns treasury bills through his shares in Berkshire Hathaway, which is enough to provide food and clothing for several generations of his descendants)

• Who are the people with "unimpaired capital" who buy stocks from distressed and panicked people? The answer is the richest people in society. These people have sufficient safe assets to meet their living expenses, and more spare money to increase their stocks when the stocks fall to the auction price.

• In addition, they may also be retirees with a cash burn rate of only 1%, or Buffett (Berkshire Hathaway invested 20% of its assets in treasury bills, and Buffett himself indirectly owns treasury bills through his shares in Berkshire Hathaway, which is enough to provide food and clothing for several generations of his descendants)

• He may also be a young man with a secure job who knows that his job skills give him a large amount of unimpaired human capital.

So, it is important to have what Josephson calls "unimpaired capital." This matter is so important that it is definitely worth emphasizing again and again. Any product that meets government-guaranteed characteristics

Short-term Treasury bills, certificates of deposit, deposits insured by the Federal Deposit Insurance Corporation, and even cash are examples of this type of capital.

Although cash can sometimes only earn meager interest, its psychological rate of return is very high.

Unimpaired capital is the elixir that keeps us calm, overcoming the flaws in human nature's approach to investing namely the fear and greed that have manifested itself in so many catastrophic moments in financial history in order to allow the mathematics of investing to do its job.

• If you have a pension and annuity for retirement, then you only need to withdraw $30,000 from the investment account every year. You only need to prepare 1,500,000.

• But I think your estimate of $30,000 a year is too little, and there will still be inflation by then, so I estimate that you should receive at least $50,000 from your investment account per year, so you may need to prepare $2,500,000 of investment assets in the end.

• Your current investment assets are almost 970,000. You should stop withdrawing from traditional retirement accounts. Your traditional retirement accounts of 600,000 are too much.

• All funds will still be allocated to ROTH in the future. I suggest that after you retire, you should transfer the funds from your traditional retirement account to ROTH.

• For a couple, the AGI taxable net income is less than 400,000, and the tax rate is below 24%. If after you retire, your husband’s income is only 130,000, you can transfer 270,000 to ROTH every year, and the tax rate is below 24%, so transfer it quickly.

If your job is easy and you still like it, you do not necessarily have to retire

• Your children are grown up and you have no debt, so why do you want to buy term. Even if you or your husband passes away, your assets are more than enough to support one person, so why buy life insurance?

• When receiving a pension, if one person receives more than two people, then one person will receive it, because the first to get the money wins first.

• The earlier you get your social security benefits, the better. Apply for social security benefits when you are 62 years old. Invest first and win first.

My questions are below. Please check whether anything is wrong and share the teacher’s suggestions

• I am about to turn 67 this year and retired last year. This year I followed my teacher’s advice and started to transfer my traditional IRA to Roth year by year. I am a retiree with low financial intelligence who neither borrows nor mortgages. Prepare to choose an asset allocation of 80% QQQ, 20% cash/SWVXX. I don’t need to withdraw money from my stock account to live my life until I am 73 RMD years old. The current stock account is as follows: approximately $1.8M:

• Brokage $798K, IRA$835, Roth $180K

• My question is as follows. Please check with the teacher to see if there is anything wrong and give the teacher’s suggestions.

• 1. I should put 20% of total assets/$362K in cash in the money market SWVXX of IRA. Should the remaining $473 of the IRA still be placed in QQQ?
• 2. Roth $180K Do you want to buy TQQQ / ProShares UltraPro QQQ instead? How is it different from ordinary QQQ? Should I just leave it alone after buying it or should I pay attention to its fluctuations?
• 3. Because Roth only has 180K, does question 1 require a new configuration combination to match it?

What does the teacher suggest?

20% of your assets, 362,000 in cash, should be placed in traditional IRA and put in money market to reduce the value of traditional IRA. The appreciation is too fast. Put money market in appreciation slower, which will benefit future taxation.

And if you have 180,000 ROTH, you can consider investing in TQQQ (QQQ with triple volatility), so that you can put an additional 360,000 (18x 2) of money in your traditional IRA.

You traditional IRA 835,000. After deducting the above 326,000 and 360,000 in cash, you still have 149,000 to invest in QQQ.

In the future, the funds you transfer to ROTH can still be invested in TQQQ. But if the future TQQQ amount is greater than the traditional IRA funds TQQQ x 2 after deducting 20% of assets in cash, you will have to reduce TQQQ.

For example, in the future, your traditional IRA assets will be 600,000 (because it is converted to ROTH) And your ROTH assets will reach 400,000.

Suppose your assets reach 2 million. 20% of 2 million is 400,000. Therefore, traditional IRA first puts 400,000 money market.

At this time, the traditional IRA 600,000 is deducted from the above 40 money market, and the remaining $200,000 is also put into money market. At this time, your traditional is all money market.

At this time, you can only put $20 of QLD or 100,000 of TQQQ in ROTH. The remaining funds in ROTH can only be placed in QQQ.

Is the above clear?

• Sell the land as much as possible. If there is nothing that cannot be sold, it can only be sold at an unsold price. Many Chinese friends’ houses could not be sold before. I said that there is no unsold house, only an unsold price. So fortunately, they sold it two or three years ago, so they were not hurt by the 2023 China real estate crash.

• Similarly, your land is of no use and will not rise in the future, so you sell it. If you can't sell it for 12,000,000, you should be able to sell it for 8,000,000. So if someone puts a price on it, you can make money faster by selling it in the stock market.

• I don’t know what the rate of return is for running a B&B. If your capital is 12,000,000, then your net rate of return (after deducting costs and personnel expenses. If you are running a B&B yourself, your own salary will be deducted before the net profit is calculated). If it cannot stably exceed 20%, that is, if you do not make a net profit of 2,400,000 a year, then sell it!

• You are now 62 years old and your trdtional IRA is 1.3 million which is way too much. From now on, you should put ROTH and Brokerage account, and you can no longer put traditional IRA.

• Your traditional IRA needs to start converting to ROTH, otherwise you will have to pay nearly 30 million in taxes when you reach the age of 75 and your RMD when you are 90 years old. (Your 1.3 million will reach 66 million by the age of 90. Normally, you have to pay taxes on half of your assets of 33 million.) Converting as early as possible will make you end up with more assets and less total taxable assets. . )

• I calculated that if you want to completely convert to ROTH before the age of 75 RMD, you have 13 years to convert, and you have to convert 180,000 to 200,000 per year.

• If you retire in three years and then transfer, the 1.3 million may become 1.9 million after three years. You have ten years left to transfer, and you will need to transfer 300,000 per year. You have no income at this time. But it may not be possible to save. The sooner the better.

Conversions are taxed as income in the current year. I believe your taxable investment account should have money to pay taxes. Otherwise, if you just rely on a traditional IRA of 1.3 million, you will only have 2 million US dollars in three years. It's not enough to retire.

When we calculate retirement assets, to be precise, only 1/2 to 2/3 of the Traditional IRA assets can be calculated as retirement assets, because part of them belongs to the U.S. government.

You can no longer hold leveraged funds when you retire. (We have mentioned that people who do not pledge borrowings for general retirement are not allowed to hold leveraged funds.), so your leveraged funds should be in a tax-free tax refund account, because in the end you may need to convert them to unleveraged funds. If you have ROTH assets, leveraged funds should be placed in a ROTH account.

• When you give birth to a child, at that time, no matter whether the child has any disease, whether the facial features are beautiful or ugly, whether a finger is missing, whether the eyes are crooked or the mouth is crooked, you must love him with your life. This is love without regrets.

• Before you get married, it is as if you are not pregnant yet, or you are only a few weeks pregnant. You have the right to choose to leave. Just like when you are pregnant, you can do prenatal check-ups, DNA tests, and any tests. If you think it is inappropriate, you can terminate the pregnancy, because the child has not been born yet, and you do not need to love him with your life. (Of course, some religious groups or beliefs believe that terminating pregnancy is inhumane. We will not discuss this issue here.)

• So you can be picky before getting married, and you can get what you want to know. If there is something you are not satisfied with or feel unwilling to do, it is like stopping the pregnancy if you find a DNA defect during a prenatal check-up.

• It's the same as your love. If you find that the other person has something or some health problem that you can't accept, then you can stop it, just like you stop pregnancy, you can leave him.

• But when you give birth to this child, or after you get married, you must be mentally prepared. You must love this child without regrets and your spouse, that is, you must love without regrets. This is a critical moment. You can make any changes before this moment occurs, but once this moment occurs, you have no reason to go back and can only love without regrets. (Of course, you can divorce in the end, but this is after you love without regrets and still cannot maintain the marriage. This is fate, just like you take care of your family without regrets but still leave.)

• Most people don’t know that they can be rich. They know that when their children grow up and go to college, they don’t know how to pledge stocks to pay for tuition, so they open a 529 so that the appreciation is tax-free and help them sell stocks to pay for tuition without paying taxes. But this is something only those who are familiar with it do.

• Because your assets are not enough for stock pledged loan borrowing, generally people with high enough assets, whose investment assets exceed US$1.5 million when their children go to college, do not need to open a 529 account at all. You can put the funds originally intended for 5292 in your own brokerage account. You do not need to sell stocks to help your children pay for tuition, but use stock pledged loans to borrow money to pay for tuition.

If the assets can be pledged with stocks to pay tuition, there is no need to open a 529. The assets are placed in your own account and the stocks are pledged for borrowing, and your assets never need to be sold.

• Of course you can invest in your house loan, but don't invest in high dividends. You can't use the dividends to pay your mortgage, because the dividends are not fixed. For example, if you invest in LQD, the interest will gradually decrease in the future, and the future dividends of your LQD may only be 3% or lower.

• So, you can invest in a small house loan, but you can never rely on dividends from stock investments or selling stocks to pay your mortgage, because the dividends will disappear and the stock price will fall. You must be able to pay the loan from your salary or other stable income to borrow.

It is okay to take out a mortgage, but repaying the mortgage involves principal and interest. Some people may have to pay more than 100,000 yuan a month for a large loan, which will cause problems.

You cannot use stock dividends or sell stocks to repay the loan because the dividends may be gone and the stocks will be wiped out, so the loan must be based on a stable salary or stable cash flow.

There is no way to increase cash flow for a retired mortgage, because the monthly payment for a mortgage of 10,000,000 for 20 years is $50,000. The monthly payment for 1 year is 600,000. If we look at it at 50 times, you have to prepare 30,000,000. As a result, if you borrow 10,000,000, you will also have to prepare an additional 20,000,000 for retirement. In fact, it increases the risk, rather than reducing the risk. Unless 2% of your retirement assets is enough to retire and pay the mortgage.

I don’t recommend buying a house. Your 10% down payment will be wasted. If you invest it, you can make tens of millions or even hundreds of millions of dollars.

Although the monthly rent and mortgage costs are the same, you still have annual real estate taxes and housing taxes. If you invest these, you will be richer.

Furthermore, the house does not need maintenance. The house does need maintenance. A broken air conditioner, broken water pipe, etc. all cost money. You don’t need to spend this money to rent a house. If you invest all the money above, you will be richer.

• For the sake of insurance, we use the lowest price of each month in the EXCEL table of our asset allocation. This is because if the lowest price occurs on that day, no matter which day of the month, as soon as it occurs, your stock may have been decapitated, so we use the lowest price of the month.

• If you are calculating on the same day, that is, on a day, rather than on a monthly basis, you may be able to use the closing price to calculate. However, the closing price at the end of the month cannot be used to calculate the period of a month. You may be swept out by the market at the lowest point in the middle of the month.

• If you think about it for one year, how outrageous it would be if you use the closing price at the end of the year to calculate, because assuming that the market's lowest point occurs in May, although it is okay to use the closing price at the end of the year to calculate the maintenance ratio, you have been cut off in May, so when our EXCEL file does not use daily lines, but monthly lines, it is safer to only use the lowest point of the month for calculation. Because the day after the lowest point opens, you will be cut off.

You are financially and mentally prepared to never look at quotes or make payments. You do not need to pay attention to them. This is the main thing to do. (That is, nothing needs to be done.)

• Buffett Shareholders Meeting: I don't recommend that people buy stocks today or tomorrow or next week or next month. I think it all depends on your situation. But in my opinion, you shouldn't buy stocks unless you expect to hold them for the long term.

• You are financially and psychologically prepared to never look at quotes or make payments. You do not need to pay attention to them. This is the main thing to do. (That is, nothing needs to be done.)

• You don't pick the bottom, neither will you, and no one else can pick a better time for you. When you buy a stock, you have to be prepared for it to drop 50% or more. As long as you feel comfortable holding it, you can feel comfortable using it.

• There have been three times in Berkshire Hathaway's history where the price of Berkshire Hathaway's stock fell 50%, three different times.

• When this happened three times, there was nothing wrong with Berkshire. But if you were to look at the price of a stock and think you have to take action because it's doing this or doing that or someone else is telling you why, you know, how can you? (So investing means buying and not selling. After buying, don’t listen to or read the information about monsters and monsters outside.)

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.

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