the Appendix

Appendix 1: Why I Ended Up Buying Only the Broad Market

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I didn't buy only broad-market index ETFs from the start. For a long time, I also researched individual stocks, chased market leaders and bought sector ETFs. I'm writing this experience down in the hope that my family won't have to take the same long way around.

1. Stock-Picking Methods I Studied

• Buffett's "consumer monopolies": This was the kind of company I looked for back then — something people use every day and buy again once it's used up, with no substitute even if they wanted to switch; when it raises its prices, customers keep coming. It makes its money from invisible assets such as its brand, holds plenty of cash and little debt, and earns a return on equity above 20% year after year. Coca-Cola, See's Candies, Gillette razors and Apple are all examples I studied.
• Philip Fisher's growth stocks: In a 1969 interview with Forbes, Warren Buffett described his approach this way: "I'm 15% Phil Fisher … and 85% Benjamin Graham." Fisher's key idea is to find companies that can grow several times over within ten years, buy them, and hold on patiently. In Common Stocks and Uncommon Profits (1958), he wrote: "If the job has been correctly done when a common stock is purchased, the time to sell it is—almost never."
• Peter Lynch's ten-baggers: Lynch teaches people to find fast-growing companies in everyday life and then check them point by point: how much of revenue comes from the main product; how fast earnings grow each year (he considered 20%–25% ideal); whether new stores or expansion are succeeding; how much room is left to grow; whether the price-to-earnings ratio is expensive; and whether institutions have yet to buy in heavily. As for when to buy, he wants you to act during big drops and crashes, when everyone is too scared to touch stocks.
• The leaders of each bull market: for example, the US tech giants from 2009 to 2022, or TSMC in Taiwan. Some people buy only the leaders of the day but don't hold them for long, on the grounds that once the tide goes out, most leaders fade.
• Sector ETFs in trend industries: Back then, my idea was to combine three masters — borrowing Masayoshi Son's "bet on the trend industries of the next thirty years," Buffett's "value certainty" and John Bogle's "just buy the haystack" — and buy index ETFs for industries like semiconductors and technology.
• The PEG ratio (price/earnings to growth): divide the P/E ratio by the earnings growth rate. Around 1 is reasonable, 0.75 or below is cheap, and 1.2 or above is on the expensive side.

2. Why I Finally Gave Up

1. There are too few winners, and you can't spot them in advance. Of the US listed companies from 1926 to 2019, 57.8% reduced their shareholders' wealth; the wealth that was created came from a very small number of companies. I might be able to explain why Buffett bought Coca-Cola back then, but I can't know ahead of time who the next Coca-Cola will be.
2. Even the biggest companies get replaced. The largest US companies by market value turn over almost completely every twenty years. Today's leaders may not still be around twenty years from now.
3. Being right about a trend industry doesn't mean you'll make money from it. Around the time Ford was founded in 1903, at least two thousand car makes came and went in the US; by the 1990s, only three American carmakers were left (Buffett, 1999). Cars really did change the world, but most carmakers' shareholders lost money. The hotter an industry, the more easily its prices get bid up, and you fall into what Jeremy Siegel calls the "growth trap."
4. It takes too much time, too many judgment calls and too much emotional control. Every judgment call is another chance to make a mistake. For a family that wants to pass its method on to its children, the simpler the better.
5. My own experience bore this out. Some of the stocks I liked and the sector ETFs I bought did perform well. But when they went a year or two without rising, or even fell sharply, I found it hard to stay calm. Broad-market ETFs don't make me anxious, because I know the indexes they track won't disappear.

3. If You Still Want to Buy Individual Stocks

The rule I give my family: if you really want to buy individual stocks, use at most 5%–10% of your total assets, as tuition, and keep the remaining 90% or more in broad-market index ETFs. That way, you satisfy your curiosity, and a single wrong call can't wreck your family's finances.

Appendix 2: A Detour I Took — Timing Long-Term US Treasuries

From 2022 to 2024, I spent a lot of time studying long-term US Treasury bonds, and I even put together my own "Uncle Rich Bubble Investment Clock." These were my rules back then; the way markets actually moved from 2023 to 2026 has shown them to be unreliable, so please don't follow them:

• Buy US dollars: when the Fed starts raising rates, the dollar rises and bonds fall;
• Buy bonds: about 2–4 months after the Fed's last rate hike, when the 10-year Treasury yield approaches the policy rate;
• Buy stocks: after the Fed starts cutting rates, up until the stock market shows the signs of a bubble top.

I also compiled plenty of "lessons from history": at the end of a hiking cycle, before the Fed announces it has stopped raising rates, the 10-year Treasury yield approaches or exceeds the policy rate, and only then has the fall in long-term bonds hit bottom; once the Fed pauses its hikes, Treasury yields won't set new highs; and if you buy long-term Treasuries on the "day of the last hike," you'll earn about 10% over one year and about 26% over three.

What Actually Happened

(Data: Federal Reserve Economic Data (FRED), DGS10 and DFF, downloaded 2026-10-12.)

None of the "lessons from history" I had drawn held up this time: rate cuts did not mean long bonds would rise, and after the Fed stopped hiking, long-term yields still set new highs. There are many reasons — inflation, government deficits, the supply of government bonds, the market's view of the future. The price of long-term bonds is driven by too many factors; it is simply not something an ordinary family can predict.

I bought long-term US Treasuries myself during this period, and my timing was too early. Later, when price plus interest had brought me close to breaking even, I sold and got out with only a small loss. If I hadn't sold then and had held on until 2026, I would have lost a lot. That wasn't good judgment on my part; I simply realized in time that I had guessed wrong, and I had a bit of luck.

Long ago, in my personal notes, I wrote this conclusion: "Long bonds (20 years or more) are too complicated — don't touch them." Now I'm even more sure of it.

The Ideas I Kept

• Bond prices move opposite to interest rates: when rates rise, bond prices fall; the longer the time to maturity, the harder they fall.
• Short-term bonds are more like cash: their prices don't move much, so they're a good place for money you'll need soon.
• Bond ETFs have no maturity date: your gain or loss depends on the price when you sell, unlike buying a bond directly and holding it to maturity, when you get your principal back.
• Foreign bonds carry currency risk: however high the interest on a US-dollar bond, you can still lose money when the New Taiwan dollar rises.
• Government bonds and corporate bonds are different: in a financial crisis, government bonds often rise while corporate bonds may fall sharply; non-investment-grade bonds (high-yield bonds) carry default risk.

My conclusion: in my family's finances, bonds play only two roles — a "stabilizer" and a "parking place for cash." I use short-term, high-quality bonds, and I don't use them to guess interest rates or trade for price gains. (See Chapter V, Section 7, "Where to Keep Your Money.")

Appendix 3: How to Avoid Scams, and a Short Glossary

Avoiding Scams: When You See These, Watch Out

Scammers keep changing their pitch, but they always play the same few cards. If you hear any of the lines below, stop first:

1. "Guaranteed profits," "You can't lose," "High returns, low risk": In all my years of investing, I've never seen anything that was truly guaranteed. Anyone who dares to guarantee it is a scammer.
2. "Add me on LINE, join the group and trade along with the teacher": People who really know how to make money don't have time to lead you in a chat group every day.
3. A celebrity vouching for something in an online ad: That face is most likely stolen. Celebrities don't pull you into chat groups through ads.
4. "Download this app first," "Wire the money to this personal account": In legitimate investing, money only ever goes into accounts at licensed brokers or banks.
5. "Spots are limited — decide today or lose your chance": A good investment isn't afraid of you taking your time. The more they rush you, the more suspicious you should be.

If something feels off, call the 165 anti-fraud hotline and ask. (This applies to Taiwan.) The Criminal Investigation Bureau's "165 Anti-Fraud Dashboard" website also shows the latest scam tactics and cases.

A Short Glossary