00477 Eternal Freedom from Worry and Stress: Wisdom and Strategies for Long-Term Investing

I. Main Theme

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This session focuses on the philosophy of long-term investing, emphasizing the importance of independent thinking and risk management. James reiterates his long-held investment philosophy: choose the right investment target (such as QQQ), buy in early and hold for the long term, ignoring short-term market fluctuations, and ultimately achieve steady wealth growth. In addition, he discusses how to maintain a positive mindset, deal with stress and anxiety that may arise during the investment process, and how to choose a reliable brokerage to ensure account security.

II. Briefing Content

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• Wealth is accumulated slowly, and enjoying the process of wealth accumulation is the meaning of life. Getting rich overnight or quickly is not the best way. Slowly accumulating wealth and enjoying it allows you to experience the true meaning of life and learn and grow from it.
• Don’t blindly pursue high returns while ignoring risks. Many people pursue quick riches and hope for super high returns, but often overlook the risks involved, which may ultimately lead to losses outweighing gains. Learn to assess risk and choose an investment strategy that matches your risk tolerance.
• Investing requires finding a definite eternity, ignoring market noise, and maintaining inner peace. Index fund investing is a definite and eternal strategy that does not require painstaking research and operation. Simply holding for the long term can yield considerable returns.
• Investment is a loser’s game, not seeking to win, but seeking not to lose. In investing, avoiding mistakes is more important than pursuing victory. Index fund investing can help investors reduce mistakes and ultimately achieve victory.
• Buying in a lump sum at any time and holding for the long term is superior to other investment methods. Investing early and holding for the long term maximizes returns and delivers the best investment returns.
• Learn to distinguish between what can be done, what is effective, what can be worried about, and what is not worth worrying about. Focus your energy on important and solvable issues, ignore those that are irrelevant or beyond your control to improve efficiency and reduce unnecessary anxiety.
• Don’t work too hard, let your money work for you. Put your money into the market and let it create wealth for you instead of devoting all your energy to work. Learn to utilize investment tools to achieve passive wealth growth.
• All pressure comes from expectations, and all worries come from not having a solution. Lower your expectations and actively seek solutions to relieve stress and anxiety.
• Learn to transfer pressure to those who can bear it and think about solutions for the worst-case scenario. Don’t bear the pressure alone, learn to seek help, and think in advance about solutions to the worst-case scenario to calmly deal with challenges.
• Maintain inner peace, focus on the important things, and ignore the insignificant things. Stick to simple things, don’t get involved in complex things, to maintain inner peace and focus on what really matters in life.
• Account security is the primary issue in investing. Choose a large, reputable brokerage to open an account and avoid using online brokers. Online brokers have security risks, such as account theft and asset freezing. Choosing a large, reputable brokerage can better protect your account security.

III. Q&A Session

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Dave:

• Sharing: Shared the results of James’ TQQQ simulation backtest and raised the question of how to avoid the risk of a sharp TQQQ drawdown.
• Question and James’s Reply: James believes that it is impossible to predict the market and avoid all risks completely. The important thing is to control risk exposure and avoid over-betting. If you are worried about the volatility of TQQQ, you can choose a more conservative investment strategy, such as QQQ. James also reminds everyone to distinguish between personal thinking and public advice, and not to be easily swayed by the thoughts of others.

Minjianlian:

• Sharing: Shared his experience of investing in stocks through his company’s savings association, as well as discussions about the MAGS fund and emergency funds.
• Question and James’s Reply:
  1. About the MAGS fund: James believes that it is uncertain whether the MAGS fund can outperform QQQ in the long term. Investment should choose targets that have been tested by time, such as QQQ or SPY.
  2. About emergency funds: James believes that emergency funds are a personal responsibility and government policies cannot be relied upon entirely. Everyone should prepare sufficient emergency funds according to their own circumstances to cope with contingencies.

Learn:

• Question and James’s Reply: Regarding the performance of 00670L, James explained the performance difference caused by USD hedging and how to solve it by investing in QLD through sub-brokerage. He emphasized that Beta and ROI are different concepts. Beta represents volatility, not ROI. The investment model in Taiwan needs to be adjusted according to specific circumstances, such as maintenance margin requirements and exchange rate fluctuations.

JJU:

• Sharing: Shared his insights on market unpredictability and the importance of mentors and friends. He believes that investing, in addition to selecting good targets, is more about maintaining inner peace and enhancing one’s spiritual level.
• Question and James’s Reply:
  1. About the difference between reinvest and buy share: James explained the difference between reinvesting and buying shares. The former automatically invests dividends or capital gains into the investment target, while the latter uses new funds to buy shares.
  2. About the fund ratio of Roth IRA and Individual Brokerage Account: It is recommended to maximize the Roth IRA limit if possible.
  3. About real estate mortgage investment: It is recommended to sell the property if possible to reduce the risk of investing in real estate. Otherwise, consider a Home Equity Line of Credit (HELOC) for investment, but pay attention to risk control and ensure that you can repay the loan on time. HELOC is a revolving credit line, similar to a credit card, which can be withdrawn and repaid at any time.

Draft down:

• Sharing: Proposed the possibility of leveraging 0% interest credit cards for investment and using the box spread strategy to increase capital utilization.
• Question and James’s Reply:
  1. About credit card investment: James believes that credit card limits are limited and there is a risk of not being able to renew the loan, making it unsuitable as a main source of investment funds. It is only suitable for short-term turnover of small amounts of funds.
  2. About the box spread strategy: James believes that the box spread strategy is too complex and risky and is not recommended for ordinary investors.

Jason:

• Question and James’s Reply:
  1. How to overcome short-term pain in the investment process: James suggested lowering expectations, not pursuing perfection or getting rich quickly, finding solutions to problems, and transferring the pressure to those who can bear it, such as superiors or more experienced individuals. Think about solutions for the worst-case scenario, such as job loss or investment losses, and maintain a positive mindset, believing that the problem will eventually be solved.
  2. About non-US tax resident investing in US stocks: James believes that non-US tax residents can use their passports to open brokerage accounts in the US without a Social Security Number. It is recommended to choose large, reputable brokers, such as Charles Schwab, and avoid using online brokers, such as Webull and Robinhood, as online brokers have security risks and imperfect regulations.

IV. Key Insights

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Investment is a loser’s game, not seeking to win, but seeking not to lose. – James

In investing, avoiding mistakes is more important than pursuing victory. Choosing the right investment target, formulating a reasonable investment strategy and strictly adhering to discipline can reduce mistakes and ultimately achieve long-term stable returns.

Buying in a lump sum at any time and holding for the long term is superior to other investment methods. – James

Investing early and holding for the long term maximizes returns and delivers the best investment returns. Time is a friend of investment. Starting early allows time to work its magic of compounding.

All pressure comes from expectations, and all worries come from not having a solution. – James

Lower your expectations and actively seek solutions to relieve stress and anxiety. When facing challenges, maintain a positive attitude and believe that you can find a way to solve the problem.

Wealth is accumulated slowly, and enjoying the process of wealth accumulation is the meaning of life. – James

Getting rich overnight or quickly is not the best way. Slowly accumulating wealth and enjoying it allows you to experience the true meaning of life. Investing is a long-term process. Don’t be impatient and enjoy the process of wealth accumulation, learning and growing from it.

Good teachers and helpful friends are important. You may not be right if you agree with someone. – JJU

In the investment process, be good at learning and thinking. Don’t blindly believe anyone’s point of view, including teachers and friends. Make your own independent thinking and judgment to make the right investment decisions.

Account security is the primary issue in investing. – James

Choosing a large, reputable brokerage to open an account, such as Charles Schwab, can better protect your account security. Avoid using online brokers as online brokers have security risks and imperfect regulations.

V. Summary

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This session focuses on the long-term investment philosophy, risk control, and mindset management. James helps students better understand the essence of investment through vivid examples and in-depth explanations. He answers students’ various questions encountered in the investment process, such as the risks of TQQQ, the importance of emergency funds, and real estate investment strategies. At the same time, students also actively share their experiences and confusion, such as using credit cards for investment and using the box spread strategy, triggering deeper thinking and discussion. James emphasizes the importance of independent thinking, advising against blindly believing anyone’s point of view. He encourages making independent thinking and judgment to make the right investment decisions. At the same time, he also reminds everyone to pay attention to account security, choose large, reputable brokers to open accounts, and avoid using online brokers.