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2 articles found

Wealth Awakening

Buy the Dip on US Treasury ETFs? Three Duration Blind Spots That Can Shrink Your Principal by 30%

Hundreds of thousands of people in Taiwan keep buying the dip on long-duration US Treasury ETFs without realizing that products with a 15-to-20-year duration can cut your principal in half in a rising-rate environment, just as the iShares 20+ Year Treasury Bond ETF (TLT) lost more than 50% from its 2020 high to its 2023 low. This article breaks down three blind spots you must understand before adding more: the math of duration times interest-rate moves that decides your maximum drawdown, the trap where yield does not equal total return and monthly distributions can come out of your own principal, and the hidden costs of FX hedging and premium/discount mechanics that are specific to Taiwan-listed US Treasury ETFs. It provides four iron rules and a four-step action plan to help you decide whether buy-the-dip is right for your situation, plus an extreme-scenario backup plan to keep your retirement savings from getting trapped by rates you cannot control.

13 min
Wealth Awakening

When Stocks Crash Hard, the Rich Are Frenzy-Buying Bonds: A 20-Minute Guide to the Wealthy Hedging Play

Stocks crash 30% and your portfolio halves, while the rich enter to buy bonds during the crash. This isn't coincidence — it's the wealth logic they never tell you: bonds aren't a tool to make you rich; they're the moat that stops your wealth from being eaten by market volatility. The median Taiwanese office worker saves only NT$10K–15K a month, and a 30% TAIEX drop can vaporize two years of savings in days; the 2008 GFC took the index down nearly 60% and required nearly 10 years to recover. This article uses 3 underlying rules to unpack the inverse relationship between bond prices and interest rates (Taiwan's Central Bank hiked from 1.125% to 2% across 2022–2023, slashing bond fund NAVs by 15% to 20%), the hidden risk of duration (a 10-year duration bond loses roughly 10% in price for every 1% rate hike), and how the bond products sold to you by Taiwanese bank RMs differ from what the rich actually buy: direct US Treasuries via overseas brokers and low-fee short-duration Treasury ETFs like SHY and IEI. Includes 4 Taiwan-specific blind spots and a 3-step action plan.

8 min