投资和投机 Investing v.s. Speculation

Investing or speculation are two very different ways of thinking. If a person sees the asset valuable and want to hold for a long time, he would like to buy it at the right price and hold it for a long time until the value is not worthy in his opinion. If a person is not sure about owning the asset while he is trying to guess its price will rise or fall and trying to profit from that, it is called speculation.


A lot of people think the stock market is volatile, and it is easy to lose money. I am asking him this question: do you think the stock is worthy? If yes, buy it with smaller amount of money over a long investing period. This way you can smooth out the volatility of prices. And you hold it until your opinion changes. If you are trying to time the market to buy low and sell high, you are more like a gambler, because nobody knows it will rise or fall tomorrow and you are not smarter than all the people trying to gauge the price. The price is hard to be “right” at any moment, because it is all about supply and demand.


This strategy (dollar-cost averaging) is particular useful when investing with index which is diversified to eliminate individual risks. If your answer is yes when investing the US market, using the strategy can help you earn market return.


无为投资 Effortless Investment Style

It is not a negative term at all to invest effortlessly. As we all know, most active investments can’t beat the broad market and the management fee and expense is way higher. A lot of famous hedge funds can’t consistently beat the market either. I bought renaissance hedge fund which claims to be one of the best in the world and its return is rather disappointing compared to the s&p 500.


Maybe as a Chinese old saying: 无为(no-action), in recognizing the market is full of all kinds of investors and traders. They may know some information you don’t know or they may employ complicated models and strategies. To beat the the market is possible with effort, but your effort is likely counter-productive and you could lose to the market.


As a average investor, staying with the market is the best and effortless strategy. The time in the market is more important than timing the market. No to mention spy 500 offers dividends payout as well.


There are several ETF tracking broad market: ivv, spy, voo. And fidelity also offers some 0 fee index fund that tracks market too.

有些的ETF是跟踪大盘的:ivv, spy,voo。fidelity 还有一些没有费用的指数基金。

ETF has a way to capture intraday return, mutual fund has a way to reinvest the dividends on your behalf, so you can completely be off the hook. So the time can be yours completely while the dividends are compounded and gain returns.


So if you want to be completely effortlessly gaining market return, zero fee index fund is your best instrument.


财富自由 Financial freedom

Usually we achieve the financial freedom by generating passive income. Once the passive income can cover the cost of living, people don’t need to work anymore. It doesn’t mean you stop working completely, but actually means you have the freedom to do what you want to do and plan your life with complete control.


Thus the first thing we need to understand what the cost of living is. What is your annual expense on rent,mortgage and grocery, dining, travel .. etc. If your annual cost of living is $50000, then if your asset can generate this income annually, then you don’t have to work anymore.


To achieve this goal, there are different methods to generate the income, each of them is associated with particular risk/return profile.


Financial Products 金融产品

Investment property 出租房

Small business/Freelance 小生意/自由职业

Startup 创业