Relying on US stocks to earn more than 15% annually! US stock master Jenny s investment method allows top multinational companies to help you earn pensions

Editorial: Recently, Taiwanese people have been investing in US stocks in a prosperous situation. Someone once analyzed that if you invest in large-scale ETFs, the annual return on regular purchases of Taiwan Stock Exchange 0050 is 10%, while the annual return on US stock SPY is 13%. Financial writer and JC financial viewer Jenny believes that the U.S. stock market is the most diverse and strongest market in the world. Whether it is an active or stable investor, you can find an investment combination that suits you. How to start investing in US stocks?

It seems difficult to invest in US stocks? Think about how many products you will use from multinational companies in your day: wake up in the morning and get a cup of Starbucks coffee. To open the computer, we use the Windows system developed by Microsoft, and the web browser is Google. Wear NIKE sports shoes to go out for exercise, wear a slim eyeglasses, and use P&G laundry serum to wash. The US stock market is actually in our lives. In an era of globalization, everyone has the opportunity to become shareholders of multinational companies.

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"From the perspective of investment, the US stock market is the strongest capital market in the world." Financial writer Jenny analyzed that it is also an ETF that is close to the trend of the market. Taiwan's well-known "Yuan Da Taiwan 50" (0050), which includes the top 50 stocks in the Taiwan stock market, creating a return rate of about 10% each year. The "Public 500 Index ETF" (SPY) of the US stock market is composed of 500 large listed companies in the United States, with a return on investment of 13% per year. "There is nothing bad for the Taiwan Stock Exchange, but it's better to have one more choice!" she said.

Why invest in US stocks? There are many choices, easy to understand, and high fund flow dynamics

University has been studying in the Department of Business Administration and has worked as a large financial institution. Jenny pointed out that her investment history is the same as many people, starting with buying funds and the Taiwan Stock Exchange. The early days of Taiwanese investing in US stocks was not as hot as today. She once bought the "Ross 2000 Fund" composed of US small and medium-sized enterprise stocks under the recommendation of brokerage firms, which is her initial experience in US stocks.

In 2012, the government launched a tax certificate plan, and the trading volume of Taiwan stocks decreased. She used the US stock market as the main investment tool. In the past 10 years, she has accumulated a set of her own investment methods, and her annualized return rate is about 15-20%. "If the U.S. stock market really goes, it won't come back!" she said with a smile.

Why invest in US stocks? Jenny pointed out that the leading stocks in the Taiwan Stock Exchange are mainly electronic stocks, and the industry has high technical skills, so it is difficult for investors to accurately grasp the company's profitability. She said, "Taiwan Electric is a good company, but I really don't understand the progress of the crystal, and I have no way to tell you whether I can make profits in the next 10 years."

Relatively, there are more than 8,000 stocks in the US stock market, covering retail, catering, travel, consumption and other fields. Even if you are not a professional investor, it is easy to find a business model that you can understand. She just started buying Apple (AAPL), Starbucks (SBUX), and NKE, which are large enterprises that are familiar to ordinary people.

Furthermore, there are many companies with a long history in the US stock market. For example, beverage manufacturer Coca-Cola (KO), daily necessities manufacturer (PG), comprehensive manufacturing company 3M (MMM), etc. The stock god Buffett once compared that these companies are established early and have relatively weak competitive advantages compared to the same industry, and are "protecting the city" and are more suitable for long-term holding.

In addition, the US stock market is a global market with very high capital flow, and investors can operate more flexibly. In the time of market panic, the US dollar is also a reliable avoidance asset in the hearts of many people. These are the advantages that other countries' stock markets are difficult to achieve.

Buying US stocks is as simple as the Taiwan stocks! The key is "finding good companies that will grow"

People who are keen on investing in the Taiwan Stock Exchange may worry about their poor English and think that there is risk of transferring money abroad, and they have some reservations about investing in US stocks. But Jenny believes that novices need not worry about language barriers. Currently, large overseas securities companies have Chinese ordering interfaces and customer service. If you are not satisfied, you can also design commissioned accounts at domestic securities companies. Although there will be a continuous fee when placing an order, you can leave the funds for delivery in the country. If you have any questions, you can also ask the operator at any time. If the transaction frequency is not very frequent, it is not a convenient option.

In terms of investment strategy, she believes that regardless of Taiwan stocks or US stocks, the core concept of investment is the same: if you find a good company that will grow, the stock price will rise. Taiwanese invest in U.S. stocks, even if they can't understand English financial reports, they can start with the company they know. For example, Amazon (AMZN), Face Books (FB), Google's parent company Alphabet (GOOG), etc. If these indicator companies have any storm in their business, the Chinese media will definitely report it.

People who like to take the initiative to choose stocks can discover many growing stocks that are ready to develop from the US stock market. Jenny, for example, a few years ago, Taiwan had almost no listed companies that used "subscribe economy" as their business model. But in the United States, software maker Adobe (ADBE) has started promoting subscription services since 2012, selling its software in a "monthly fee", successfully transforming and bringing strong share price growth. In recent years, Spotify (SPOT), a streaming music service provider that has been subscribed to, and Netflix (NFLX), also has good stock prices.

"There are a lot of things to learn in the U.S. stock market. Every time I read financial reports, I find new trends that few people talk about in the country, just like growing with the movements of the world." Jenny said. If you prefer to deposit dividends, the US stock market also has some "dividend growth stocks". For example, the technology stock AAPL has had an annual dividend growth rate of about 5 to 10% in the past five years, which can bring stable cash flow.

For those who are passive investing, there are several well-known index ETFs in the US stock market, such as DIA that tracks the average industrial index, QQQ that tracks the Nasdaq 100 index, SPY that tracks the general 500 index, VOO that tracks the general 500 index, etc. Someone has calculated that if SPY is invested regularly in 1997, the annualized return on the return is about 7%. If you enter the market in the past 10 years, you will soon encounter most markets, and your annualized return rate can reach 14%. Re-invest profits and profits over the long term will be quite impressive.

How to find the purchase time point? 3 lines of judgment on stock price trends, and stocks must also be left behind.

Found a good company that will grow. How to decide the time to buy and sell? Jenny noted that she would use technical analysis to judge trend changes in stock prices. The simplest 3 lines include: 20-day average line (average stock price transaction price in the past month), 50-day average line (average stock price in the latest quarter) and 200-day average line (average stock price in the latest year).

If the slope of the current moving average is positive and the share price is above these 3 lines, it shows that the company's share price is growing up recently. On the contrary, it is a downward signal. During the growth process, stock prices usually do not "just rise and fall", but will fluctuate for a period of time. When the stock price of the growing stock is "consolidated", it is the time for her to buy it. In this way, you can buy corporate stocks with development prospects at a lower cost.

As for the shares that will be sold, it is usually due to changes in the company's fundamentals, such as growth trends, long-term profits are not as good as expected, etc. Or, when a better investment tag appears in the market, it is also the time when she considers the profit-making process. She emphasized that stocks should also be "spendless". When the price reaches 5 to 10%, she will immediately stop. If the stock price rebounds, just buy it back, and the price difference is used as an insurance premium. Don’t let it go at the beginning and you must stop losing it. The stock price has fallen all the way, and you will eventually regret it.

For example, the stock price of the US precision fast food Shake Shack (SHAK) fell sharply between February and March 2020 due to the impact of the epidemic. She sold it first and bought it back after the epidemic in the United States calmed down and the stock price began to rebound. Since April 2020, Shake Shack's stock price has been rising. She calculated that the profit had reached a certain level, so she sold her shares again, turning them into the next wave of stocks such as investment mail, travel, and aviation that may rise due to the epidemic.

Jenny admitted that active investment is indeed more laborious. Taking herself as an example, she spent 4 or 5 hours almost every day to read financial media such as "Huar Street Journal" and "Financial Times" and research corporate financial reports. Some news is a "catalyst" for stock prices, such as announcing financial receipts, changing management levels, having major mergers, integrating businesses and liquidating assets, etc. These major information related to corporate governance may cause severe changes in stock prices, investors may wish to pay more attention.

Retirement management requires both growth and avoidance to establish a stable investment portfolio with large-scale ETFs and bonds

If you don’t want to spend too much effort to study stocks, Jenny suggests that the main investment can be placed in US stock ETFs that track the big-scale index, such as VTI, VT, SPY, VOO, etc. Regardless of the development of a particular company, as long as the overall economic trend in the United States continues to grow, there is no need to worry about the impact of profits. She will also actively invest in profits and invest in large-scale ETFs to balance the stability and growth of investment combinations.

In addition, after retirement, you have less fixed income, and you should pay more attention to risk management. She pointed out that although the return rate of bonds is not as good as stocks, it can provide protection and bring stable returns when the stock market fluctuates violently. Stable and conservative investors can maintain 50% to 80% of the bonds in the investment portfolio. She specifically recommends long-term and high-liquidity bond ETFs, such as iShares' 20-year-plus US Public Debt ETF (TLT), iShares' US Core Comprehensive Debt ETF (AGG), Vanguard General Debt Market ETF (BND), etc., which are good avoidance tools.

She also specifically reminded retirees that if there is a property plan, it is best to make profits regularly, transfer the money back to the country in batches, or invest through a commissioned account from the beginning. Previously, someone invested in US stocks and made a profit of more than NT$20,000. The inheritor had to hire an overseas lawyer and complete the legal process before he could prove that he had a legal inheritance. With the deduction of property tax and related administrative expenses, the original investment income was almost nothing left.

In addition to property tax, Taiwan's Tax Law also stipulates that if the annual overseas income exceeds more than 1 million yuan per year, the individual's annual income should be counted as a real application. If investors have any doubts, they can confirm with the National Tax Bureau to avoid contact with the law.

Why are there any dissatisfaction with US stocks, Jenny believes that US stocks can be said to be the most diverse market in the world and where all innovative trends occur. Whether it is an active or stable investor, you can find the investment portfolio that suits you best here. People who love learning will also benefit a lot from studying investment standards. "It is of course the best thing to make money when doing what you like!" she said with a smile.

Original text: Relying on US stocks to earn more than 15% annually! The investment method of US stock master Jenny allows top-notch multinational companies to help you earn pensions