Throughout my investment journey, I have come to trust the S&P 500 and consider it the core of my wealth storage. By understanding the US Constitution, the free society, and the powerful military behind it, I believe that the S&P 500 represents the strongest companies and the most stable economy in the world. Here’s why I made this decision and the thinking behind it:
The US Constitution and Free Society are the Strongest Guarantees
I firmly believe that the US Constitution and the free society structure are among the most valuable assets in the world. The rule of law and the powerful military, particularly the aircraft carrier, provide a unique guarantee for global investors. If the US Constitution protects investors’ rights and the economy relies on the free market, it will provide a solid foundation for my chosen assets.
Globally, while other countries have excellent companies, they are not protected by a constitution and military power like the US. The US Constitution makes it a special economy, and this guarantee allows American companies to occupy an important position globally. Therefore, I think choosing the S&P 500 is not just choosing a basket of top global companies, but also choosing a system protected by the US Constitution and military power.
S&P 500 Represents the Strongest Global Companies
The S&P 500 is not a single “stock” asset; it is a collective symbol of the 500 strongest companies in the world. These companies are leaders in multiple industries and have global competitiveness. Their strength is not only reflected in their market share and financial performance but also in the stable, law-based, free market, and powerful military behind them.
I believe that the 500 companies represented by the S&P 500 not only occupy a leading position in finance and technology globally but also enjoy the protection of the US Constitution and powerful military. This is why I think the S&P 500 has a unique advantage that no other asset can match.
Market Fluctuations and Long-term Beliefs
Although the S&P 500 has experienced several market crashes, such as the 2008 financial crisis and the 2020 COVID-19 pandemic, I believe these are just short-term fluctuations. In the long term, the fundamentals of the S&P 500 have not changed; it still represents the strong economic power and corporate competitiveness of the US. Therefore, during market crashes, my decision is not to sell the S&P 500 but to hold it firmly. Even if the market experiences temporary crashes, I do not think any other asset can replace the S&P 500 as a long-term value storage tool.
Many investors choose to sell assets and exchange them for cash during market crashes, but I think the value of cash is far less than the S&P 500. In my view, the S&P 500 is the most valuable asset globally, while cash depreciates over time due to inflation. Therefore, unless it’s for necessary living expenses, I choose to focus my wealth on the S&P 500 and not sell it easily.
Diversification and Risk Management
Although I have unwavering trust in the S&P 500, I still maintain a certain level of diversification. In my asset allocation, I invest 90% of my wealth in the S&P 500 and the remaining 10% in the PIMCO Enhanced Short Maturity Active ETF (MINT), which has high liquidity. This configuration not only maintains the growth potential of most of my assets but also provides additional liquidity and risk cushion during market fluctuations.
I chose MINT because it represents low risk and stable returns. This part of my assets can help me maintain a certain level of cash flow during market turbulence, allowing me to respond to unforeseen emergencies or adjustments.
Why Not Diversify into Other Markets or Assets?
Many investment experts recommend diversifying investments to reduce risk, such as investing in international markets, gold, or real estate. However, I firmly believe that no country or market can be stronger than the US. The US Constitution and free society are the foundation of my trust, and the US military power and aircraft carriers fleet provide a unique safety guarantee for global investors. In this context, I think the S&P 500 not only represents the top 500 companies in the world but also the strongest economy and military system globally.
Although I understand the importance of diversification, due to my firm trust in the US free society and Constitution, I believe the S&P 500 is the most valuable and worthy long-term holding asset globally. Therefore, I do not tend to diversify my assets into other markets or assets like gold, as they do not have the same guarantees and potential as the S&P 500.
How to Face Uncertainty and Challenges?
Although I have deep trust in the S&P 500, I am not complacent about the changes in the global economic situation and political landscape. Although I do not have in-depth knowledge of global geopolitics and international trade conflicts, I remain rational and calm. I cannot predict every market fluctuation, I can rely on long-term investment strategies to cope with these uncertainties.
For me, the core of long-term investment is patience, trust, and determination. Even if the global economy undergoes drastic changes, I will rely on my trust in the S&P 500 and the US system, continue to hold it, and not make emotional decisions due to short-term fluctuations.
Conclusion: Rational Investment, Firm Beliefs
Through this period of thinking and investment decision-making, I have established my own investment philosophy: the S&P 500 is not just a stock market index, but a representation of my trust in the US Constitution, free society, and powerful military. I choose to invest most of my wealth in the S&P 500 and maintain a long-term holding strategy because it represents the top companies and the most stable economy globally.
Although I know that global economic and political risks are unavoidable, I believe the S&P 500 is the most worthy long-term holding asset. If the market crashes in the future, I will firmly believe in my decision and not sell easily, but instead, choose to wait patiently for the market to recover.
Epilogue
Through in-depth analysis of the logic behind the S&P 500, I am confident in my investment decisions. Long-term market fluctuations cannot shake my trust in the US Constitution and free society, which has given me a more firm belief in my investment path. In my future investment journey, I will continue to adhere to this philosophy, maintain sensitivity to market changes, and continuously increase my knowledge to better cope with potential risks.