I. Main Topic#
The theme of this session is Embrace the New Bull Market and Invest Long-Term. James believes that the global monetary easing policy and the rapid development of AI technology herald the arrival of a new bull market. He advises everyone to invest in the Nasdaq 100 index fund (QQQ or 00662) and view market fluctuations with a long-term perspective.
II. Content Summary#
- A new bull market is coming: The world has entered an era of loose monetary policy with the start of a rate cut cycle, which will drive the stock market up. This bull market may be a slow one but will continuously rise.
- Invest confidently in the Nasdaq 100 index fund: QQQ could increase by 50 times in the next 20 years, with an annualized return of over 20%, making it the best investment target.
- Individual stocks are unreliable: Individual stock investment is risky, and in the long run, almost all of them will disappear. They are very difficult to outperform the market in the long term. It is recommended not to waste time and energy on stock selection.
- Do not invest in the Chinese stock market: The Chinese stock market is not mature enough; consider investing in it after 30 years.
- Comparison of household asset allocation in the US and Taiwan: American families invest most of their assets in securities to create social value, while Taiwanese families prefer cash, insurance, and real estate, locking up funds in non-appreciating areas.
- Leveraging through stock pledges: Using stock pledges to borrow increases liquidity and allows for continued investment to enjoy the benefits of compound growth. With an understanding of asset allocation, the interest cost of borrowing can be almost negligible.
- Plan for retirement early: Young people are advised to invest in 00662, and retirees can choose 00646 (SPY) or 0056 according to their fund size.
- Emphasize family education: Parents should cultivate their children’s financial management concepts from an early age, guide them to make long-term investments, stay away from bad habits such as short-term speculation and gambling, and lead by example.
- Don’t blindly trust high-yield investment products: Any investment product promising high returns may be a scam. It is important to understand its operating mechanism and learn to discern between true and false.
- The dangers of short-term trading: Short-term trading will miss the best investment opportunities. Long-term investment in index funds will yield more stable returns.
- The purpose of cash allocation: It is not for profit, but for dealing with emergencies like unemployment or a market crash. It is advisable to keep more than 10% of your assets in cash.
III. Q&A Session#
Retired Doctor Poch:
- Sharing: After learning about James’ investment philosophy, he found a more relaxing and suitable investment method.
- Question: How to obtain a stable cash flow after retirement? Is it necessary to adjust the investment strategy of 00662?
- Answer: The investment target can be adjusted according to the size of the retirement fund. Choose 00646 (SPY) or 0056 with lower volatility to guarantee cash flow.
IM:
- Sharing: He tried to guide his child to invest by matching contributions and increased his vigilance against high-yield traps.
- Question 1: How to guide a child to invest and prevent them from spending investment income?
- Answer: Emphasize that investment is a long-term behavior. Income cannot be withdrawn for consumption. Funds should grow continuously through compound interest.
- Question 2: How to choose a safe and reliable trust company? How to avoid the traps of high-yield trust products?
- Answer: Any trust company that promises high returns may be a scam. You should take control of your own investment and financial management rights, clearly stipulate investment in index funds in the trust clause, and set up a regulatory unit to ensure fund security.
Rose:
- Sharing: She frankly talked about her past investment failures and the process of gradually establishing the correct investment concept under the guidance of James.
- Question 1: What are the differences and pros and cons of Margin Loan and Pledge Loan? The interest rate of Margin Loan from IB is relatively low. Is it necessary to transfer to Charles Schwab for Pledge Loan?
- Answer: Margin Loan is riskier, and Pledge Loan is relatively safe. If the interest rate of IB’s Margin Loan is low, you can continue to use it, but pay attention to controlling the borrowing ratio, preferably no more than 20%.
- Question 2: The return on cash allocation will decrease in the interest rate cut cycle. Is it still necessary to allocate cash?
- Answer: The purpose of cash allocation is not for profit but to deal with contingencies, such as unemployment or a market crash. It is advisable to keep more than 10% of your assets in cash.
- Question 3: How to manage children’s investment accounts? Under whose name should it be, yours or the child’s?
- Answer: It is recommended to open an account in the child’s name to cultivate their financial management concept, but control the amount and provide proper investment guidance. Estate planning can be done after the child becomes an adult.
Phoenix:
- Sharing: He shared his confusion about handling company stock options and finally adopted James’ suggestion.
- Question 1: How to deal with the stock options of unlisted companies?
- Answer: If the company has a high possibility of going public, it is recommended to sell it to an investment company before the listing to get cash and invest in QQQ.
- Question 2: What do you think of Bitcoin? Can I invest in it?
- Answer: If you already hold a small amount of Bitcoin, you can continue to hold it, but do not invest any more capital. It is recommended to focus on investing in QQQ.
Allen:
- Sharing: He shared his questions about 401k and stock investment and eventually made adjustments under James’ advice.
- Question 1: What should I do if I have too much money in my 401k account?
- Answer: It is recommended to stop making further contributions to 401k and transfer some funds to the Roth IRA account through the Backdoor Roth IRA.
- Question 2: How to switch from holding Nvidia stock to QQQ?
- Answer: Sell Nvidia stock as soon as possible, transfer funds to QQQ, and pledge stocks to borrow money to pay taxes.
Haoqing:
- Sharing: He demonstrated the difficulty of stock selection through data analysis and illustrated the advantages of long-term investment in QQQ with practical examples.
- Question: Can stock picking beat QQQ?
- Answer: Stock selection is difficult to outperform QQQ in the long run. Even if it beats the market in the short term, transaction costs and taxes need to be considered. Invest in index funds for the long term.
Xiang:
- Sharing: He shared his confusion about saving for children’s education and inheritance and finally found a solution under James’ advice.
- Question 1: Is it better to use a 529 Education Fund or invest in QQQ for children’s education savings?
- Answer: Investing in QQQ is recommended because it has higher long-term returns and is more flexible.
- Question 2: How to do estate planning?
- Answer: For larger estates, it is recommended to set up an irrevocable trust and consult an estate lawyer for planning.
Kevin:
- Sharing: Frankly admitted his past investment failures and regained confidence under the guidance of James, starting to embark on the road of steady investment.
- Question: How many listeners are losing money on investments?
- Answer: Past investment experience is not important. What is important is to establish the correct investment concept and believe in the value of long-term investment in index funds.
Julia:
- Sharing: Shared her lessons learned from investing in Chinese concept stocks and second-tier growth stocks, and how to guide children to make long-term investments.
- Question 1: How to deal with losses caused by investment in Chinese concept stocks and second-tier growth stocks? - Answer: It is advisable to “cut your losses” and switch funds to QQQ in a timely manner.
- Question 2: How to guide children to make long-term investments? - Answer: You can use an investment calculator to show children the power of compound interest and guide them with your own investment experience.
Peter:
- Sharing: Shared his experience working at Apple and confirmed that many high-income earners also choose to invest in index funds.
- Question: How to balance family expenses and investment? - Answer: It is recommended to use stock pledges to borrow money to meet living expenses and continue investing in QQQ, so that assets can continue to grow through compound interest.
Jason:
- Sharing: He shared his confusion about company tax declaration and finally found a suitable solution under James’ advice.
- Question: How to choose the tax filing method?
- Answer: If your income is low, you can choose to file a 1099; if your income is high, you are advised to establish an S Corporation.
Cindy:
- Sharing: Shared her experience of guiding her child to invest in Roth IRA and keep away from gambling.
- Question: How to guide children to invest in Roth IRA? How to guide children to stay away from gambling?
- Answer: Open a Roth IRA account for the child and make matching contributions. Lead by example and educate your child with the experiences and stories of people around you.
IV. Highlights#
Lending is more powerful than the atomic bomb; it’s ten times the atomic bomb! – James
When encouraging people to use stock pledges for borrowing and investment, James used this analogy to vividly illustrate the power of leverage.
Investing should be easy and fun. – Hola
This is what a listener said when she shared her investment experience. She also tried short-term trading, but finally found that long-term investment suited her better.
Each person has a different destiny when it comes to money. – Peter
Peter said this thought-provoking sentence when he shared his experience of persuading his father to invest in QQQ. This also reflects that investment and financial management should be combined with one’s own situation to find a suitable way.
All the money in the world is mine; you just need to take it and use it. – James
James used humorous words to express his confidence in the market when encouraging everyone to invest, which also reflects his optimistic and positive attitude towards life.
V. Conclusion#
In this live broadcast, James once again emphasized the concept of long-term investment in index funds. He also provided specific investment advice for the audience based on the current market situation, covering asset allocation, retirement planning, children’s education, stock options handling, leverage, and tax planning. The sharing from the students provided other listeners with valuable reference experience, showing their growth and earnings during the process of learning about investment and financial management.
Disclaimer: This article is only for personal learning notes and does not constitute any investment advice.