硅谷居士搬运号

Looking back at 1987: That shocking Black Monday

In today's financial news, if the stock market index drops by 2% or 3% in a single day, it is often considered major news. However, imagine if the stock market plummeted by 22.6% in one day—what a sight that would be!

This is not a flight of fancy, but a reality that occurred on October 19, 1987, known as the infamous “Black Monday.”

On that suffocating day, the S&P 500 index plunged by 20.5%. The performance of the Dow Jones Industrial Average was even more dire, with a staggering drop of 22.6%. These two figures still hold the record for the largest single-day percentage drop in the history of the U.S. stock market. Compared to this collapse of over 20%, the several percentage point fluctuations that later appeared in the market seem trivial.

What exactly triggered this unprecedented financial storm? What insights does it leave for today’s investors?

Looking back at early 1987, the market atmosphere was quite optimistic. In the first eight months of that year, the S&P 500 even recorded an approximate 40% increase. However, beneath this seemingly prosperous facade, risks were quietly accumulating.

The macroeconomic environment at that time was unstable. The U.S. was suffering from increasingly serious inflation and trade deficits. In an effort to stabilize the dollar’s exchange rate, the Federal Reserve adopted an interest rate hike strategy, which directly diminished the attractiveness of stocks compared to bonds. Meanwhile, after several years of a bull market, stock price-to-earnings ratios were at historically high levels, and market sentiment became exceptionally sensitive and fragile. Furthermore, geopolitical turmoil in the Middle East exacerbated investors' anxiety.

If these macro factors can be likened to a pile of dry kindling, then algorithmic trading technology was the spark that ignited the crisis.

In the 1980s, a strategy known as “Portfolio Insurance” became popular on Wall Street. Its principle was simple: once the stock market fell below a certain threshold, computer programs would automatically sell stock index futures to hedge against risks.

The disaster of “Black Monday” was triggered by this mechanism. Affected by the market decline the previous Friday, the market opened significantly lower on Monday morning. Almost immediately, a chain reaction erupted: the drop in stock prices activated automated trading programs, leading to a massive sell-off; the collapse of futures prices dragged down the spot market, triggering more programmatic sell orders. This vicious cycle formed a “death spiral,” and the speed of the events exceeded the reaction capacity of human traders, ultimately leading to a complete depletion of market liquidity and resulting in this historic crash.

Although the drop that day was terrifying, in the long run, this crisis did not lead to a lasting economic depression. Surprisingly, the S&P 500 index ended up achieving a 5.3% increase for the entire year of 1987.

However, this crisis permanently reshaped the trading rules of the stock market.

First of all, it gave rise to circuit breakers. U.S. regulators realized that during extreme market panic, trading must be paused to allow investors to regain their composure. The current rules for U.S. stock market circuit breakers stipulate: when the S&P 500 index drops by 7% in a single day, trading is halted for 15 minutes; if the decline expands to 13%, trading is paused again for 15 minutes; and if the decline reaches 20%, the market is closed for the entire day.

Secondly, the role of monetary policy underwent a transformation. Then-Federal Reserve Chairman Alan Greenspan quickly committed to injecting sufficient liquidity into the market, establishing the Federal Reserve's crucial role as the “lender of last resort” during crises.

Finally, exchanges recognized that traditional manual processing systems struggled to cope with the impact of high-frequency trading, leading to a comprehensive modernization upgrade of trading systems.

For investors, the biggest lesson from this history is to adhere to investment discipline.

Although “Black Monday” seemed like the end of the world at the time, if you entered the market in early 1987 and held onto the S&P 500 index fund until the end of the year, your account would still achieve a 5.3% profit.

Further data shows that if you consistently invested in the S&P 500 index fund every month starting in 1987 and held it until early 2026, you would earn an annualized return of up to 10.3%. Even if you had made a one-time investment of all your funds in 1987 and never added more, as long as you held onto the S&P 500 index fund until early 2026, your annualized return could still reach 10.4%.

This clearly demonstrates that for true long-term investors, staying in the market is more important than trying to time it perfectly.

The history of “Black Monday” tells us that the market is filled with both rationality and madness. We look back not to predict the exact timing of the next crash, but to ensure that when the storm strikes again, the umbrella you hold remains sturdy.

If you wish to learn more about my investment philosophy and financial experience, feel free to visit Amazon or Google Play Books to purchase my Chinese book "Shortcut to Wealth," or its English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

**U.S. Stock Market History: The Rise and Fall of the Bretton Woods System and Its Lessons**

**The Confluence of Events: The Reconstruction of Order**
Set the clock back to July 1944, when World War II was nearing its end. Representatives from 44 countries gathered in a place called Bretton Woods in New Hampshire, USA. The mission of this historic meeting was of utmost importance: to rebuild a new global economic order from the ruins.

The conference yielded fruitful results, with representatives signing documents including the Articles of Agreement of the International Monetary Fund and the Articles of Agreement of the International Bank for Reconstruction and Development, collectively known as the Bretton Woods Agreement, marking the official birth of the famous “Bretton Woods System”.

**Core Mechanism: The Pact Between the Dollar and Gold**
The operational mechanism of this system is vividly referred to as “dual peg” in later generations, with simple yet powerful rules:
1. **The Dollar is Pegged to Gold:** The U.S. government promises to exchange every ounce of gold for a fixed rate of 35 dollars.
2. **National Currencies are Pegged to the Dollar:** Other countries' currencies maintain a fixed exchange rate with the dollar.

The confidence in this arrangement stemmed from the fact that the United States held nearly 70% of the world's gold reserves at the time. Essentially, this gave the dollar a status equivalent to gold, establishing its hegemony as the world's sole core reserve currency.

This was followed by the establishment of the International Monetary Fund (IMF) and the World Bank. The former is responsible for providing short-term loans to maintain the stability of the international monetary system, while the latter focuses on providing medium to long-term credit to assist member countries in their economic recovery.

**The Golden Age and Its Inherent Paradox**
In the more than twenty years following the war, the Bretton Woods system served as a stabilizing force. It established an order characterized by fixed exchange rates, providing a predictable and stable environment for international trade, effectively reducing trade barriers, and directly giving rise to the post-war economic “Golden Growth Period”. The dollar also established itself as the preferred currency for international reserves, settlements, and payments.

However, this system, seemingly perfect, concealed an insurmountable logical contradiction—the “Triffin Dilemma”:
* On one hand, to support the expansion of global trade, the U.S. must continuously export dollars, which inevitably leads to trade deficits;
* On the other hand, as dollar exports exceeded limits, the international community began to question whether the U.S. had enough gold reserves to redeem these paper currencies.

**The Collapse of the System: The Dawn of Fiat Currency**
By the late 1960s, as U.S. fiscal deficits and inflation soared, countries led by France began to exchange dollars for physical gold on a large scale.

On August 15, 1971, President Nixon was forced to announce the closure of the gold window, ending the dollar's convertibility into gold. This decision marked the complete collapse of the Bretton Woods system, and humanity fully entered the era of fiat currency.

**Investment Insights: The Asset Moat under Credit Expansion**
Although the system collapsed, the benefits of the dollar as a reserve currency did not disappear. More interesting changes occurred in the capital markets: under the Bretton Woods system, stock markets were constrained by the gold standard and experienced less volatility; after the system's collapse, as the purchasing power of the currency was diluted, the stock market gradually evolved into a safe haven against inflation.

Once the dollar completely transformed into a fiat currency, the U.S. began to use interest rate leverage to adjust global liquidity, and the U.S. stock market no longer simply reflected the domestic economy but evolved into a “reservoir” of global capital. The end of the Bretton Woods system was, in fact, the prelude to the era of credit expansion, evidenced by the soaring prices of global core assets over the past 50 years.

**Data as Evidence: Why U.S. Stocks Outperform Gold**
Since 1971, the purchasing power of fiat currencies, including the dollar, has depreciated by over 90% against gold. This means that holding a large amount of cash for the long term is a poor financial strategy.

Although gold is often seen as a tool for preserving value, historical data tells us to take a longer view. For example, in the 50 years from 1975 to 2025:
* **Gold Performance:** An annual growth rate of approximately 7.1%.
* **U.S. Stock Performance:** An annual growth rate of around 11%.

Let’s calculate with a specific investment: if you invested $10,000 in gold in 1975, by 2025, this asset (excluding storage costs) would grow to $310,000, an increase of approximately 31 times.
However, if you had chosen to invest in an S&P 500 index fund at that time, your asset would balloon to an astonishing $1.91 million—6.2 times the return of investing in gold!

These detailed data once again confirm a conclusion: amid the tide of monetary system reform, high-quality stock assets (like U.S. stocks) are not only among the few survivors but should also become an indispensable ballast in our asset allocation.

The History of the US Stock Market: A Review of the 1929 Wall Street Crash

In 1929, Wall Street in the United States experienced an unprecedented stock market disaster. This not only left a significant mark in the history of global finance but was also a crucial turning point for the economy of the United States and the world. It marked the end of the 'Roaring Twenties' and heralded the beginning of a decade-long Great Depression.

Next, let us review this far-reaching financial disaster together.

First, what were the roots of this stock market crash?

Before 1929, the U.S. economy had indeed gone through a decade of expansion. However, beneath the surface of prosperity, undercurrents had already begun to surge. Analysts in later years identified several serious problems with the economy and the stock market boom at that time.

The first was excessive speculation and margin trading. In the 1920s, stock trading evolved into a nationwide frenzy. Many investors purchased stocks through financing, paying only 10% in cash, while borrowing the remaining 90% from brokers. This meant that once stock prices fell, investors would quickly find themselves in a severe debt crisis.

The second issue was overproduction and insufficient consumer purchasing power. Although U.S. industrial productivity soared, workers' wages grew relatively slowly. By the late 1920s, the markets for durable goods such as cars and radios became saturated, leading to inventory backlogs for companies and weakening profit expectations.

The third issue was the agricultural crisis. While cities appeared prosperous, American farmers had already fallen into depression due to dwindling demand after World War I and collapsing agricultural prices.

Finally, there was a lack of regulation. The financial markets at the time did not have strong regulatory bodies like today's SEC (Securities and Exchange Commission), leading to widespread phenomena of stock price manipulation, insider trading, and excessive bank lending.

When the storm of the stock market crash finally arrived, almost everyone was caught off guard.

In fact, the stock market crash of 1929 did not happen overnight; it went through several rounds of painful sell-offs.

1. September 1929: After reaching a peak on September 3, the U.S. stock market began to experience turmoil.

2. Black Thursday (October 24): Panic officially erupted. The market plummeted at the opening, with trading volume hitting a historic record. Although bankers like J.P. Morgan intervened to stabilize the market temporarily, confidence had already been shaken.

3. Black Monday (October 28): The wave of selling returned, with the Dow Jones Industrial Average plunging nearly 12.8% in a single day.

4. Black Tuesday (October 29): The market saw a second consecutive day of plummeting, with the Dow Jones Industrial Average dropping 11.7% in a single day. The entire stock market completely collapsed, with panic-stricken investors selling off at any cost, resulting in chaos in the trading hall. On that day, the savings of millions of people vanished.

By July 8, 1932, when the stock market hit a temporary bottom, the Dow Jones Industrial Average had fallen by a staggering 89% compared to its peak in early 1929!

Subsequently, the U.S. stock market entered a long recovery period. It wasn't until 25 years later in 1954 that the Dow Jones Index returned to the levels of 1929.

Of course, the impact of this stock market crash far exceeded the stock market itself.

First, it triggered a collapse in the banking industry. With a large number of loans uncollectible and panic-driven bank runs, thousands of banks declared bankruptcy, and the cash that people had saved in banks evaporated.

Secondly, the unemployment rate in the U.S. skyrocketed. As consumer demand dried up, businesses went bankrupt one after another. The unemployment rate in the U.S. rose from 3% in 1929 to 25% in 1933.

Finally, as the world's largest economy at the time, the U.S. stock market crash triggered a global chain reaction. The U.S. stopped lending abroad, and Congress passed the infamous Smoot-Hawley Tariff Act to drastically increase tariffs, leading to a shrinkage in global trade, with countries like Germany and the UK also falling into deep crises.

As the saying goes, 'a blessing in disguise'?

Due to the immense destructive power of this stock market crash, it successfully prompted a shift in the role of the U.S. government from laissez-faire to active intervention.

In 1933, after President Franklin D. Roosevelt took office, he implemented the 'New Deal' and pushed for bold reforms. The key measures included:

1. The establishment of the FDIC (Federal Deposit Insurance Corporation) to ensure the safety of public deposits and rebuild the banking system's credit framework.

2. The creation of the SEC (Securities and Exchange Commission). In 1934, Congress passed laws to establish the SEC, a federal agency responsible for regulating the stock market, combating insider trading, and requiring public companies to disclose accurate financial information.

3. The passage of the Glass-Steagall Act by Congress, which mandated the separation of commercial banks (deposit and loan businesses) from investment banks (stock underwriting businesses) to prevent banks from diverting depositors' funds for high-risk speculation.

4. Expansion of public works. The federal government employed the unemployed on a large scale through various agencies to build infrastructure to stimulate demand, including the famous Hoover Dam.

These measures and a series of laws and regulations that followed made the U.S. financial system and stock market safer and more reliable.

In fact, in the nearly one hundred years since, the U.S. stock market has not experienced such a drastic decline again. This indirectly confirms that both investors and the U.S. government have matured considerably. For today's investors, this is undoubtedly a tremendous blessing.

When we look back at the stock market crash of 1929, it is not difficult to see the tremendous destructive power of greed and high leverage in an unregulated environment.

Fortunately, this stock market crash permanently changed the operational model of American capitalism and gave rise to the modern financial regulatory system.

I believe that in the next hundred or even thousand years, we are unlikely to see a drop of over 80% in the U.S. stock market again.

The Wall Street crash of 1929 has become a swan song of history.

A Review of the US Stock Market History: The 1929 Wall Street Crash

In 1929, Wall Street in the United States witnessed an unprecedented stock market crash. This was not only a dark moment in world financial history but also a significant turning point for the American and global economy. It marked the definitive end of the 'Roaring Twenties' and ushered in a decade-long Great Depression.

Next, let's review this far-reaching stock disaster.

First, why did this crash happen?

Prior to 1929, the American economy experienced a decade of expansion. However, beneath this prosperous facade, dark currents were brewing. Analysts believe that the economic and stock market boom of the time harbored several major hidden dangers:

First was excessive speculation and margin trading. In the 1920s, stock trading became a nationwide frenzy. Many investors purchased stocks using borrowed funds, paying only 10% in cash, with the remaining 90% borrowed from brokers. This meant that once stock prices fell, investors would quickly find themselves in serious debt crises.

Second was overproduction and insufficient consumption. Although American industrial productivity soared, wage growth for workers lagged. By the late 1920s, the markets for durable goods such as cars and radios had become saturated, leading to severe inventory backlogs and declining profit expectations.

Additionally, there was an agricultural crisis. While cities flourished, American farmers had already fallen into a state of depression due to decreased demand post-World War I and plummeting agricultural prices.

Lastly, there was a lack of regulation. The financial markets of the time lacked robust regulatory bodies like today's SEC (Securities and Exchange Commission), making stock price manipulation, insider trading, and excessive bank lending extremely common.

When the storm of the crash finally descended, almost everyone was caught off guard.

In fact, the stock market crash of 1929 did not happen overnight but was preceded by several rounds of brutal sell-offs:

1. **September 1929**: After peaking on September 3, the US stock market began to experience severe fluctuations.
2. **Black Thursday (October 24)**: Panic officially erupted. After the market opened, stock prices plummeted, and trading volumes set historical records. Although bankers, including J.P. Morgan, intervened to stabilize the market temporarily, confidence had already been shaken.
3. **Black Monday (October 28)**: A wave of selling hit again, with the Dow Jones Industrial Average falling nearly 12.8% in one day.
4. **Black Tuesday (October 29)**: The market fell for the second consecutive day, with the Dow Jones Industrial Average dropping another 11.7%. The entire stock market collapsed, and panicked investors sold off at any cost, leading to chaos in trading halls. On that day, the savings of millions of people vanished in an instant.

It was not until July 8, 1932, that the stock market reached a temporary low point. At this time, the Dow Jones Industrial Average had fallen a staggering 89% compared to its peak in early 1929!

After this, the US stock market entered a long recovery period. It wasn't until 25 years later, in 1954, that the Dow Jones index returned to the levels of 1929.

Of course, the impact of this stock disaster extended far beyond the stock market itself:

First, it led to the collapse of the banking industry. With many loans uncollectible and widespread panic-induced bank runs, thousands of banks failed, and the cash people had deposited in banks disappeared completely.

Second, it caused the unemployment rate in the US to soar. With consumer demand depleted, many businesses went bankrupt, and the unemployment rate skyrocketed from 3% in 1929 to 25% in 1933.

Finally, since the US was the largest economy in the world at the time, the stock disaster triggered a global chain reaction. The US stopped foreign lending, and Congress passed the infamous Smoot-Hawley Tariff Act, significantly raising tariffs and leading to a contraction in global trade, causing countries like Germany and the UK to fall into deep crises.

However, as the saying goes, every cloud has a silver lining.

Due to the immense destructive power of the stock disaster, it successfully prompted a shift in the role of the US government from laissez-faire to active intervention.

After President Franklin D. Roosevelt took office in 1933, he implemented the New Deal, undertaking bold reforms. Key measures included:

1. **Establishment of the FDIC (Federal Deposit Insurance Corporation)**: Ensuring the safety of public deposits and restoring trust in the banking system.
2. **Creation of the SEC (Securities and Exchange Commission)**: In 1934, Congress passed legislation to establish the SEC, a federal agency responsible for regulating the stock market, combating insider trading, and requiring companies to disclose accurate financial information.
3. **Enactment of the Glass-Steagall Act**: Mandating the separation of commercial banks (deposit and loan services) from investment banks (stock underwriting activities) to prevent banks from using depositors' funds for high-risk speculation.
4. **Expansion of public works**: The federal government employed the unemployed on a large scale through various agencies to build infrastructure to stimulate demand, including the famous Hoover Dam.

These measures, along with subsequent laws and regulations, made the US financial system and stock market more secure and reliable.

In fact, in the nearly one hundred years that followed, the US stock market has never experienced such a drastic drop again. This indirectly indicates that both investors and the US government have become increasingly mature. For today's investors, this is undoubtedly a great blessing.

When we reflect on the stock market crash of 1929, it is evident that the lack of regulation led to the immense destructive power of greed and high leverage.

Fortunately, that stock disaster permanently changed the way American capitalism operates and gave birth to the modern financial regulatory system.

I believe that in the coming century or even millennium, we are highly unlikely to witness another drop of over 80% in the US stock market.

The Wall Street crash of 1929 has become a timeless elegy.

The wealth gap in the United States is widening increasingly

In the past few decades, thanks to the strong performance of the U.S. stock market and real estate market, American household wealth has achieved sustained growth.

As we enter 2026, the total wealth of American households has surpassed $180 trillion, with an average wealth of $530,000 (approximately 3.7 million yuan).

However, alongside the overall growth of wealth, the disparity between the rich and the poor in the United States is also intensifying.

According to data released by the Federal Reserve, as of the end of 2025, the distribution based on household wealth is as follows:

1. **The top 1% of households** hold 31.7% of the nation's wealth, compared to 23% in 1989. The proportion of wealth held by this group has reached a new high in over 30 years.

2. **The top 10% of households** own 68% of the total wealth, while the proportion in 1989 was 61%.

3. **The remaining 90% of households** hold only 32% of the wealth, down from 39% in 1989.

4. **The bottom 50% of households** possess only 2.5% of the wealth, lower than 3.5% in 1989.

The rapid growth of wealth among affluent families is primarily attributed to the larger proportion of stocks and business equity in their asset allocation. In contrast, the wealth of the average middle class and low-income families is mainly concentrated in owner-occupied housing.

For example, households with an annual income exceeding $100,000 account for 87% of the entire stock market share.

This data brings us a profound insight: if we hope to accumulate wealth quickly, we must adopt more aggressive saving strategies and invest more assets into the stock market.

Detailed data:

Dear friends in the United States, do you all have a 529 account?

Dear parents and friends in the United States, have you already opened a 529 account?

The decline in China's birth population reached 17%

According to the latest data released by the National Bureau of Statistics of China, as of the end of 2025, the total population of the country is 1,404,890,000 (i.e., 1.4 billion and 489 million). Compared to the end of the previous year, the total population decreased by 3.39 million.

It is noteworthy that the total number of births for the year was 7.92 million. This figure not only represents a significant decline of 17% compared to the previous year but also sets a record low since 1949.

Historical evidence indicates that this is the first time in more than two hundred years that China's birth population has fallen below 8 million. From a historical perspective, this can indeed be seen as a major change not seen in two centuries.

More concerning is the long-term trend of this rapid decline in the newborn population. Looking back at 2017, the newborn population was still 17.23 million. However, in just 8 years, this number has been halved, falling by more than half!

If the current trend continues, it is expected that by around 2035, China's annual birth population may drop below 4 million. For reference, the birth population in the United States in 2024 is estimated to be 3.6 million. At that time, China's birth population is very likely to be lower than that of the United States.

Looking ahead to 2035, China's total population may fall below 1.3 billion and become one of the countries with the most severe aging population globally.

The continuous and rapid decline in population will inevitably impact many industries. Among them, the education, consumption, and real estate sectors, which are core components of China's economy, will be the first to be affected.

As I mentioned earlier, given the irreversible trend of rapid population decline in China, real estate outside core regions no longer holds long-term investment value. If you own rental properties in second-tier cities and below, it is advisable to sell them as soon as possible and allocate to assets with higher yields, such as U.S. stock index funds.

Appendix: Historical birth population data in China
1949: 12.75 million
1950: 14.19 million
1951: 13.49 million
1952: 16.22 million
1953: 16.37 million
1954: 22.32 million
1955: 19.65 million
1956: 19.61 million
1957: 21.38 million
1958: 18.89 million
1959: 16.35 million
1960: 14.02 million
1961: 9.49 million
1962: 24.51 million
1963: 29.34 million
1964: 27.21 million
1965: 26.79 million
1966: 25.54 million
1967: 25.43 million
1968: 27.31 million
1969: 26.90 million
1970: 27.10 million
1971: 25.51 million
1972: 25.50 million
1973: 24.47 million
1974: 22.26 million
1975: 21.02 million
1976: 18.49 million
1977: 17.83 million
1978: 17.33 million
1979: 17.15 million
1980: 17.76 million ("One Child Policy" begins)
1981: 20.64 million
1982: 22.30 million
1983: 20.52 million
1984: 20.50 million
1985: 21.96 million
1986: 23.74 million
1987: 25.08 million
1988: 24.45 million
1989: 23.96 million
1990: 23.74 million
1991: 22.50 million
1992: 21.13 million
1993: 21.20 million
1994: 20.98 million
1995: 20.52 million
1996: 20.57 million
1997: 20.28 million
1998: 19.34 million
1999: 18.27 million
2000: 17.65 million
2001: 16.96 million
2002: 16.41 million
2003: 15.94 million
2004: 15.88 million
2005: 16.12 million
2006: 15.81 million
2007: 15.91 million
2008: 16.04 million
2009: 15.87 million
2010: 15.88 million
2011: 16.00 million ("Two-child policy" begins)
2012: 16.35 million
2013: 16.40 million ("Single-child policy" begins)
2014: 18.87 million
2015: 16.55 million
2016: 17.86 million ("Universal Two-Child Policy" begins)
2017: 17.23 million
2018: 15.23 million
2019: 14.65 million
2020: 12.00 million
2021: 10.62 million ("Universal Three-Child Policy" begins)
2022: 9.56 million
2023: 9.02 million
2024: 9.54 million
2025: 7.92 million

Appendix 2: Recent death population data in China
2015: 9.75 million
2016: 9.77 million
2017: 9.86 million
2018: 9.93 million
2019: 9.98 million
2020: 9.97 million
2021: 10.14 million
2022: 10.41 million
2023: 11.10 million
2024: 10.93 million
2025: 11.31 million

Johnson & Johnson's Fourth Quarter Performance Release

On January 21, 2026, Johnson & Johnson, a leading company in the U.S. healthcare industry, officially disclosed its fourth quarter financial report.

The financial report shows that Johnson & Johnson's performance in this quarter was impressive: total revenue reached $24.6 billion, achieving a year-on-year growth of 9%; net profit surged to $5.1 billion, a significant year-on-year increase of 49%.

Looking back at the overall performance of the past year, the company accumulated a net profit of $26.8 billion, approximately 187 billion yuan. In terms of employee productivity, Johnson & Johnson has a total global workforce of about 138,000 people (with over 10,000 employees in China). Based on this, the average net profit generated per employee per year is as high as $190,000, equivalent to 1.3 million yuan.

In the capital market, Johnson & Johnson currently has a market capitalization of about $520 billion, ranking 16th among U.S. listed companies.

In terms of business layout, Johnson & Johnson's product lines broadly cover three core areas:
1. **Innovative Pharmaceuticals**: including oncology, immunology, psychiatry, and infectious disease medications;
2. **Medical Technology**: including surgical instruments, orthopedics, electrophysiology, plastic surgery, and wound care equipment;
3. **Personal Care Products**: involving baby care, oral care, skin care, women's health, and allergy care.

The company owns numerous globally renowned brands and products, such as Tylenol, Johnson's, Listerine, Neutrogena, and Band-Aid.

The History of the US Stock Market: The Origin of the New York Stock Exchange and the Buttonwood Agreement

In today's grand landscape of global finance, the New York Stock Exchange (NYSE) undoubtedly occupies a central position, like the most dazzling gem in a crown. However, this financial empire that now commands attention did not begin in a soaring marble palace, but rather beneath an ordinary sycamore tree.

Today, let us turn our gaze to late 18th century Manhattan and revisit the Buttonwood Agreement, which laid the foundation for modern finance.

Time rewinds to the early 1790s, during the chaotic initial period of the newly formed United States. To repay the enormous debts accumulated during the War of Independence, the first Secretary of the Treasury, Alexander Hamilton, issued the first federal bonds. This was followed by the emergence of bank stocks.

However, the securities trading market of that era was severely lacking in regulation. Market dominance was in the hands of auctioneers who not only bought and sold stocks but also engaged in the trade of tobacco, grain, and even slaves, creating a chaotic market environment. To make matters worse, in early 1792, speculator William Duer triggered the first financial crisis in American history, leading to a market crash.

Faced with plummeting prices and the complete loss of investor confidence, stockbrokers deeply realized: if the industry continued in disorder, it would ultimately lead to its demise.

On May 17, 1792 (the 57th year of the Qianlong Emperor), beneath a lush sycamore tree in front of 68 Wall Street, 24 stockbrokers held a historic meeting. To exclude non-professional auctioneers from the securities business and to rebuild the industry's credibility, they signed a succinct agreement known as the Buttonwood Agreement. The text contained only two commitments:

"We, as brokers in the buying and selling of securities, do hereby solemnly swear and mutually pledge: from this day forward, our commission rate for buying and selling any type of public securities for any client shall never be less than 0.25%; at the same time, we will prioritize each other's interests in transactions."

This self-regulatory agreement established two core principles:
1. **Fixed Commission:** Eliminate destructive price wars.
2. **Priority Among Peers:** Build a closed "club" system to ensure members enjoy the best trading conditions.

The signing of the Buttonwood Agreement marked the end of the era of open-air trading for brokers. In 1793, they moved to the nearby Tontine Coffee House. This quickly evolved into the financial hub of Manhattan, where brokers exchanged market intelligence while enjoying coffee, completing the vast majority of early debt and stock transactions.

As the American economy flourished, this informal loose organization became inadequate to meet market demands. In 1817, brokers in New York decided to draw on the experiences of their Philadelphia counterparts to establish a more tightly structured management organization.

On March 8, 1817, this organization was officially named the New York Stock & Exchange Board.

By 1863, this name was further simplified to the globally renowned New York Stock Exchange (NYSE), abbreviated as "the Exchange."

Despite undergoing multiple name changes, the New York Stock Exchange traces its founding year back to 1792, the year the Buttonwood Agreement was signed.

Over two hundred years later, it is widely recognized that it was this brief agreement that transformed Wall Street from an ordinary street into a synonym for global finance.

Through this agreement, we can clearly see: long before government regulation intervened, stockbrokers had already established trust and rules by voluntarily signing internal agreements, which is the cornerstone of the stable operation of modern capital markets.

Until the stock market crash of 1929 triggered the Great Depression, in order to restore investor confidence in the capital market, the U.S. Congress passed legislation in 1934 to officially establish the Securities and Exchange Commission (SEC). Since then, the SEC, as an independent regulatory agency of the federal government, has been committed to protecting investor rights, maintaining fair and orderly markets, and promoting capital formation.

In 1865, the sycamore tree that witnessed the historical upheaval unfortunately fell during a thunderstorm, but the financial seeds it had sown had already grown into towering trees.

Today, the NYSE processes astronomical volumes of transactions daily, and modern electronic screens have long replaced the manual shouting of prices, yet the core logic contained in the ink of the Buttonwood Agreement—trust, rules, and efficiency—still flows through the veins of the market.

Whenever you stroll the streets of downtown Manhattan, or place stock and fund trades through your mobile phone or computer, please remember: all these magnificent achievements stem from that agreement beneath the sycamore tree on that early summer afternoon in 1792.

If you wish to delve deeper into my investment and financial management experiences and insights, feel free to visit Amazon or Google Play Books to purchase my Chinese financial book "Shortcut to Wealth," or its English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

The Story of Silicon Valley: The Legend of the HP Garage

Today, in the 21st century, whenever the term "Silicon Valley" is mentioned, what often comes to people's minds are the dazzling glass-walled buildings and the endless technological innovations. However, the true origin of Silicon Valley actually began with the pure friendship between two young men and how a visionary professor cleverly resolved the issue of Stanford University's land being "non-sellable."

Going back to 1938, two Stanford University graduates—Bill Hewlett and Dave Packard—rented a modest wooden garage at 367 Addison Ave, Palo Alto. Little known is that this garage was less than two kilometers away from the Stanford University campus.

The initial startup capital of $538 they received came from the generous support of Stanford professor Frederick Terman, who was later honored as the "Father of Silicon Valley."

It was in that unremarkable garage that Hewlett and Packard developed their first successful product—the HP 200A audio oscillator.

The first major customer of this product was none other than the famous Walt Disney. At that time, Disney was busily producing the film "Fantasia" and purchased eight improved oscillators for testing and calibrating the cinema sound systems.

In 1939, Hewlett-Packard (HP) was officially founded. The company name was formed by combining the last names of the two young men. Rumor has it that they originally decided whether to name the company Hewlett-Packard or Packard-Hewlett by flipping a coin. Clearly, in that game, Packard won.

As the 1940s rolled in, Professor Terman keenly observed a regrettable phenomenon: the excellent engineering talents cultivated by Stanford University had to cross the United States to seek development on the East Coast after graduation. He profoundly realized that if local job opportunities could not be created, California would forever remain merely a talent-exporting place.

However, there was a strict clause in the will of Stanford University's founder, Leland Stanford: the land of Stanford University could never be sold. Faced with the dual dilemmas of lack of funds and idle land, Professor Terman proposed a bold breakthrough plan: since the land could not be sold, it could be leased long-term. This proposal ultimately gained approval from the university.

In 1951, the Stanford Industrial Park (now renamed Stanford Research Park) was officially established, marking the birth of the world's first high-tech park founded by a university.

This concept is a stroke of genius. Stanford University obtained urgently needed operating funds through land leasing, while students gained valuable internship and employment opportunities.

In 1954, HP became one of the first tenants to move into the park. This "academic + industry" closely integrated operational mechanism laid the foundation for the classic Silicon Valley model.

Subsequently, more and more industry giants took root and grew in the park, including large defense contractors Lockheed, Xerox, Tesla, Meta, VMware, SAP, and so on.

Looking back through the river of history, we can clearly see: the rise of HP and Stanford's land strategy together forged the unique "Silicon Valley model":

1. **Garage Culture:** It symbolizes that innovation does not require expensive office buildings, only an excellent idea and solid hands-on ability.
2. **Integration of Production, Education, and Research:** Universities are no longer closed ivory towers, but engines of innovation and incubators for enterprises.

Today, this HP garage has transformed into a private museum. It has not only been designated as a California historical landmark but also listed on the National Register of Historic Places.

People have given it a more resounding name: the birthplace of Silicon Valley.

**Title: Latest Data Focus: China's Birth Population Decline Reaches 17%**

Dear friends, according to the authoritative data recently released by the National Bureau of Statistics of China, by the end of 2025, the total national population will be 140489 million. Compared with the end of the previous year, this figure has decreased by 3.39 million.

It is noteworthy that the total number of births for the year is 7.92 million. This number not only represents a significant decline of 17% compared to the previous year but also sets a new record low since the founding of the country in 1949. According to relevant research and analysis, this is also the first time in over 300 years of history that China's birth population has fallen below the 8 million mark.

As the total population continues to decline rapidly, it is expected to trigger a chain reaction in various industries. Among them, education, mass consumption, and real estate may feel the impact of this trend first.

Below is a detailed data compilation of China's historical birth population for your reference:

**Appendix: Overview of China's Historical Birth Population Data**

1949: 19.34 million
1950: 20.23 million
1951: 21.07 million
1952: 21.05 million
1953: 21.51 million
1954: 22.60 million
1955: 19.84 million
1956: 19.82 million
1957: 21.69 million
1958: 19.08 million
1959: 16.50 million
1960: 13.91 million
1961: 11.90 million
1962: 24.64 million
1963: 29.59 million
1964: 27.33 million
1965: 27.09 million
1966: 25.77 million
1967: 25.62 million
1968: 27.56 million
1969: 27.15 million
1970: 27.35 million
1971: 25.78 million
1972: 25.66 million
1973: 24.63 million
1974: 22.34 million
1975: 21.08 million
1976: 18.53 million
1977: 17.86 million
1978: 17.45 million
1979: 17.26 million
1980: 17.86 million (“One Child” policy begins)
1981: 20.78 million
1982: 21.26 million
1983: 18.99 million
1984: 18.02 million
1985: 21.99 million
1986: 23.92 million
1987: 25.29 million
1988: 24.64 million
1989: 24.14 million
1990: 23.91 million
1991: 22.65 million
1992: 21.25 million
1993: 21.32 million
1994: 21.10 million
1995: 20.63 million
1996: 20.67 million
1997: 20.38 million
1998: 19.42 million
1999: 18.34 million
2000: 17.71 million
2001: 17.02 million
2002: 16.47 million
2003: 15.99 million
2004: 15.93 million
2005: 16.17 million
2006: 15.85 million
2007: 15.94 million
2008: 16.08 million
2009: 15.91 million
2010: 15.92 million
2011: 17.97 million (“Two-Child Policy” begins)
2012: 19.73 million
2013: 17.76 million (“Single Child Policy” begins)
2014: 18.97 million
2015: 16.55 million
2016: 17.86 million (“Universal Two-Child” policy begins)
2017: 17.23 million
2018: 15.23 million
2019: 14.65 million
2020: 12.00 million
2021: 10.62 million (“Universal Three-Child” policy begins)
2022: 9.56 million
2023: 9.02 million
2024: 9.54 million
2025: 7.92 million

**【Data Attention】China's birth population year-on-year decline reached 17%**

According to the latest data released by the National Bureau of Statistics of China, as of the end of 2025, the total national population is 1,404,890,000, a decrease of 3,390,000 compared to the end of the previous year.

Notably, the total number of births for the year was only 7,920,000. This figure not only represents a significant drop of 17% compared to the previous year but also sets a new record low since the founding of the country in 1949. Relevant studies and analyses indicate that this is also the first time in the past 300 years that China's birth population has fallen below the 8 million mark.

With the continued rapid shrinkage of the total population, various sectors of society are expected to face far-reaching impacts. Key industries such as the education system, mass consumption, and real estate may feel the effects of this trend first.

**Appendix: Detailed Overview of China's Annual Birth Population Data**

1949: 19,340,000
1950: 20,230,000
1951: 21,070,000
1952: 21,050,000
1953: 21,510,000
1954: 22,600,000
1955: 19,840,000
1956: 19,820,000
1957: 21,690,000
1958: 19,080,000
1959: 16,500,000
1960: 13,910,000
1961: 11,900,000
1962: 24,640,000
1963: 29,590,000
1964: 27,330,000
1965: 27,090,000
1966: 25,770,000
1967: 25,620,000
1968: 27,560,000
1969: 27,150,000
1970: 27,350,000
1971: 25,780,000
1972: 25,660,000
1973: 24,630,000
1974: 22,340,000
1975: 21,080,000
1976: 18,530,000
1977: 17,860,000
1978: 17,450,000
1979: 17,260,000
1980: 17,860,000 ("One Child Policy" begins)
1981: 20,780,000
1982: 21,260,000
1983: 18,990,000
1984: 18,020,000
1985: 21,990,000
1986: 23,920,000
1987: 25,290,000
1988: 24,640,000
1989: 24,140,000
1990: 23,910,000
1991: 22,650,000
1992: 21,250,000
1993: 21,320,000
1994: 21,100,000
1995: 20,630,000
1996: 20,670,000
1997: 20,380,000
1998: 19,420,000
1999: 18,340,000
2000: 17,710,000
2001: 17,020,000
2002: 16,470,000
2003: 15,990,000
2004: 15,930,000
2005: 16,170,000
2006: 15,850,000
2007: 15,940,000
2008: 16,080,000
2009: 15,910,000
2010: 15,920,000
2011: 17,970,000 ("Two-child Policy for Couples Both Being Only Children" begins)
2012: 19,730,000
2013: 17,760,000 ("Two-child Policy for Couples Who Are Not Only Children" begins)
2014: 18,970,000
2015: 16,550,000
2016: 17,860,000 ("Universal Two-Child Policy" begins)
2017: 17,230,000
2018: 15,230,000
2019: 14,650,000
2020: 12,000,000
2021: 10,620,000 ("Universal Three-Child Policy" begins)
2022: 9,560,000
2023: 9,020,000
2024: 9,540,000
2025: 7,920,000

Silicon Valley Chronicles: The Famous "Eight Traitors"

William Shockley was born in London, England, and was the only child in his family. When he was three years old, Shockley moved with his parents to Santa Clara Valley in California (what is now Silicon Valley) and spent his childhood and teenage years in Palo Alto—this small town is where I currently reside.

Shockley was undoubtedly a genius. He graduated from the world-renowned California Institute of Technology and the Massachusetts Institute of Technology, then joined Bell Labs, becoming one of the inventors of the transistor. For this outstanding contribution, he was awarded the Nobel Prize in Physics in 1956.

In 1955, Shockley left Bell Labs and returned to his hometown of Santa Clara Valley, founding the Shockley Semiconductor Laboratory.

With his high reputation, Shockley attracted eight of the top young scientists in the United States to join him, including Robert Noyce, Gordon Moore, and Eugene Kleiner.

Although Shockley was a genius in science, he performed poorly in management. He was naturally suspicious, requiring employees to take lie detector tests and stubbornly insisting on developing outdated technological routes.

In 1957, unable to endure Shockley's authoritarian style, these eight young people collectively submitted their resignations. Shockley was furious and labeled them the "Eight Traitors."

These eight "traitors" then joined Fairchild Semiconductor, funded by Sherman Fairchild, whose parent company was located on the East Coast.

Later, Fairchild Semiconductor achieved unprecedented success technologically. Notably, Noyce invented the Integrated Circuit, achieving the remarkable feat of integrating multiple components onto a single silicon chip, which became one of the most significant technological breakthroughs in semiconductor history.

Although Fairchild Semiconductor was technologically advanced, its parent company on the East Coast limited employees' stock option incentive mechanisms. Thus, the "traitors" chose to leave again.

By the late 1960s, the talent drain from Fairchild Semiconductor evolved into one of the most spectacular scenes in Silicon Valley's history. These "Fairchild kids" took root and sprouted in various places, founding many influential companies that greatly changed the fate of Silicon Valley.

For example, Noyce and Moore co-founded Intel, which became one of the most influential companies in semiconductor history. Later, Moore proposed the famous "Moore's Law," which states that the number of transistors that can be placed on an integrated circuit doubles approximately every two years.

Eugene Kleiner founded one of the oldest and most influential venture capital firms in Silicon Valley—Kleiner Perkins (KPCB). Since its establishment in 1972, Kleiner Perkins has invested in over 500 companies, including giants like Amazon, Google, Intuit, and Sun Microsystems. To this day, the "K" in Kleiner's name remains a symbol of capital power in Silicon Valley.

Similarly, Jerry Sanders, also from Fairchild Semiconductor, founded AMD in 1969. As of 2026, the company's market value has surpassed Intel in the US semiconductor sector, ranking behind NVIDIA and Micron.

This year marks the 69th anniversary of the "Eight Traitors" resignation incident. Looking back at history, it’s not hard to see that the true significance of these eight individuals has long surpassed that resignation; they broke the tradition of lifetime employment and pioneered the Silicon Valley model centered on technological innovation, venture capital, and employee stock options.

As later generations described: Fairchild Semiconductor was like a mature dandelion; when the wind blew, its seeds spread throughout the valley, thus creating Silicon Valley.

Ximalaya has now launched the audiobook "The Shortcut to Wealth"!

Today I received a message from a friend, mentioning that she has started listening to the audiobook version of my work "The Shortcut to Wealth" on the Ximalaya platform. It is worth noting that this version is narrated by a real person, not AI-generated voice.

Previously, I also noticed that some bloggers on YouTube have been making videos reading my book.

It should be explained that most of the versions you are currently encountering are based on the free version I released in 2025. The formally published "The Shortcut to Wealth" has undergone many adjustments and optimizations in both the overall structure and specific content.

I sincerely thank these bloggers for their hard work! Seeing more readers recognizing this book brings me great comfort!

If you enjoy the audiobook format, feel free to listen on the above platform.

If you wish to gain a deeper understanding of my investment and financial management experiences and insights, please visit the Amazon website or Google Play Books to purchase my Chinese financial book "The Shortcut to Wealth" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

Can you achieve weight loss without intentionally dieting?

I previously recommended the book "Glucose Revolution," which is indeed a remarkable work on health and wellness. In this book, the author Jessie Inchauspé constructs a highly valuable set of core principles known as the "Glucose Goddess" rules.

Among all the suggestions, the simplest and most effective one is: **The order of eating is crucial!**

Research shows that even with completely identical meals, simply adjusting the order of consumption can reduce post-meal blood sugar peaks by **75%**. This change not only reduces inflammation in the body, lowers hunger, and improves skin issues, but it also aids in weight control and even weight loss.

For the past few years, I have personally adhered to the "golden order of eating" recommended in the book, which is as follows:

**1. First Priority: Fiber (Vegetables)**

* **Core Principle:** Must eat vegetables first.
* **Scientific Basis:** Dietary fiber forms a "protective layer" on the intestinal walls, slowing the body's absorption of sugars and starches consumed afterward.
* **Ingredient Suggestions:** Prefer minimally processed vegetables (such as salads, stir-fried greens, broccoli, etc.).
* **Special Note:** The vegetables here should not contain excessive starch (the book classifies potatoes, yams, etc., as starchy, rather than fiber vegetables).

**2. Second Priority: Protein and Fat**

* **Core Principle:** Follow up with meat, eggs, dairy, or soy products.
* **Scientific Basis:** Proteins and fats further delay gastric emptying. When gastric emptying slows down, the rate at which sugars enter the bloodstream also decreases.
* **Ingredient Suggestions:** Fish, meat, eggs, tofu, nuts, and cheese, etc.

**3. Third Priority: Starches and Sugars**

* **Core Principle:** Consume staple foods and desserts last.
* **Scientific Basis:** At this point, since the stomach already has fiber and protein as a "buffer layer," the conversion of starch in staple foods to glucose entering the bloodstream is significantly slowed, keeping the blood sugar curve stable.
* **Ingredient Suggestions:** Rice, noodles, bread, potatoes, and various sugary desserts or fruits.

Additionally, the author shares several very practical key tips:

* **Avoid "naked" carb eating:** Try to avoid directly consuming desserts or bread on an empty stomach. If you must eat, please have a few slices of ham or a small bowl of salad as a precursor; the body's response will be entirely different.
* **No need to wait deliberately:** There is no need to wait a long time between these three types of food; simply consume them in physical order.
* **Moderate post-meal activity:** It is recommended to engage in moderate exercise after meals, rather than lying on the sofa scrolling through your phone or watching TV. Personally, I prefer activities like walking, brisk walking, or jogging.

If you encounter situations where you cannot completely separate these three types of food, such as when eating rice bowls or sandwiches, please try to first pick out the vegetables to eat, and enjoy the rice or bread last.

I strongly agree with a quote from the author: “**Changing the order of eating does not mean giving up the foods you love, but rather changing their impact on your body.**”

If you wish to control your weight or simply pursue a healthier body, you might want to try the methods mentioned above.

Of course, if your primary goal is **weight loss**, then controlling the total intake of food remains paramount. Because even if you strictly follow the optimal eating order mentioned above, if you still consume excessive sugars and fats, there remains a risk of weight gain.

Financial Notes #112: In-Depth Analysis of the Top US Tech ETF Rankings

Friends who have followed my past notes should know that the Vanguard Information Technology Index Fund (VGT) holds an absolute dominant position in my investment portfolio, accounting for about 95%. This is primarily due to my deep confidence in the future development of the information technology sector.

Previously, I also recommended that investors who cannot directly allocate to a fund fully tracking VGT (such as those in the Chinese market) consider the Nasdaq-100 Index Fund as an effective alternative.

Recently, many readers have asked me about the differences, strengths, and weaknesses among several other major US tech sector ETFs, mainly focusing on XLK, IYW, and the Nasdaq-100 Index Fund QQQ (or QQQM).

To address these inquiries, today I’ll conduct a comprehensive side-by-side evaluation and analysis of these popular funds.

### 1. Fundamentals and Holding Structure

First, we need to clarify the significant differences in underlying holding logic among these four index funds:

1. **VGT and XLK: Pure Tech Exposure**
Both closely track the 'Information Technology' sector under the GICS (Global Industry Classification Standard). This means their holdings **do not include** Amazon (classified under Consumer Discretionary), Google, and Meta (classified under Communication Services). If you want your portfolio to be more purely focused on software, hardware, and semiconductors, these two funds are better suited.
* **Key Difference:** XLK covers only large-cap tech companies, while VGT has a broader exposure, including firms of various market capitalizations.

2. **QQQ: Broad Non-Financial Giants**
This fund tracks the Nasdaq-100 Index, encompassing the 100 largest non-financial companies listed on the Nasdaq. Besides tech stocks, it also has substantial allocations to biopharmaceutical, retail, and communication services industry leaders.

3. **IYW: A Tech Fund with Internet Exposure**
Although positioned as a tech ETF, IYW deliberately retains major internet giants such as Meta and Google. Its holding style sits between pure tech and broad tech.

**Core Data Comparison Table:**

| Metric | VGT | QQQ | IYW | XLK |
| :--- | :--- | :--- | :--- | :--- |
| **Assets Under Management** | $130B | $410B | $21B | $94B |
| **Number of Holdings** | 321 | 100 | 140 | 70 |
| **Expense Ratio** | 0.09% | 0.18% | 0.38% | 0.08% |
| **Standard Deviation** | 19.8 | 18.4 | 20.1 | 19.3 |
| **Sharpe Ratio** | 1.02 | 0.94 | 1.03 | 1.03 |
| **10-Year Annualized Return** | 23.8% | 20.4% | 23.9% | 23.5% |
| **15-Year Annualized Return** | 19.2% | 18.4% | 19.0% | 19.1% |

### 2. Deep Analysis and Investment Summary

**1. Risk and Volatility**
From the standard deviation data, QQQ exhibits the lowest volatility and the most stable performance, while IYW shows the highest volatility. Notably, XLK has the fewest holdings—only 70—raising concerns about concentration risk.

**2. Historical Return Rates**
Looking back at the 10-year and 15-year annualized returns, VGT performs the best, followed closely by XLK and IYW, while QQQ ranks last in this metric.

**3. Risk-Adjusted Returns (Sharpe Ratio)**
The Sharpe ratio is a key indicator of risk-adjusted returns. Data shows that VGT, IYW, and XLK have nearly identical Sharpe ratios, all exceeding that of QQQ. From the perspective of seeking excess returns, these three outperform QQQ.

### 3. How Should Investors Choose?

Based on the above analysis, please match your choice according to your investment preferences:

* **Seeking Pure Tech Exposure:** Choose **VGT** or **XLK**.
* **Preferring Diversified Holdings (including small- and mid-cap tech stocks):** **VGT** is the best option.
* **Targeting S&P 500 Tech Leaders:** Consider **XLK**.
* **Prioritizing Balanced Allocation and Low Volatility:** Opt for the Nasdaq-100 Index Fund, such as **QQQ** or **QQQM**. Special note: QQQM has a lower expense ratio than QQQ and can serve as an excellent alternative.
* **Special Note on IYW:** Although IYW’s strategy effectively captures the benefits from the internet, software, and semiconductor sectors, and delivers strong long-term cumulative returns, its expense ratio of **0.38%** appears relatively low in value compared to the current trend of declining fees across index funds.

**In summary**, all four funds are top-tier in the tech investment space. Regardless of which one you ultimately choose, as long as you hold it for the long term, you can expect substantial time-based returns.

If I must provide a personal priority ranking, here’s my recommendation:
1. **VGT**
2. **XLK**
3. **IYW**
4. **QQQ (or QQQM)**

If you’d like to learn more about my investment philosophy and in-depth insights, feel free to visit Amazon or Google Play Books to purchase and read my Chinese financial book *The Shortcut to Wealth*, or its English edition *The Shortcut to Wealth: Your Simple Roadmap to Financial Independence*.

JPMorgan Chase releases impressive Q4 and full-year financial results

On January 13, 2026, as a leader in the global banking industry, JPMorgan Chase officially announced its fourth-quarter financial performance.

Data shows that total revenue for the quarter reached $46.8 billion, a 7% increase year-over-year. In terms of business segments, interest income amounted to $25.1 billion, also achieving a 7% growth; operating profit reached $15.2 billion, up 8%.

Looking at the full year of 2025, JPMorgan Chase achieved a net profit of $57 billion (approximately RMB 399 billion), a remarkable performance that firmly secures its position as the world's top bank.

In terms of workforce efficiency, the bank has 317,000 employees, with each employee generating an average net profit of $180,000 annually.

To date, JPMorgan Chase's total market capitalization has reached $860 billion, unmatched in the global banking sector.

Deep Analysis of Global Stock Market Returns

It is a well-known fact that the U.S. stock market, as the leader of the global capital market, has an enormous scale, accounting for approximately 40% of the total global market capitalization.

Not only is the U.S. market massive in size, but its performance has also been remarkable. As of the end of 2025, the S&P 500 Index—the benchmark for the U.S. large-cap market—achieved an astonishing average annual return of 11.1% over the past 50 years!

This phenomenon has led many online users to question: shouldn't the stock markets of emerging countries with higher GDP growth rates, such as India, outperform the U.S.?

However, the reality is different. There is actually only a very weak positive correlation between a country's GDP growth rate and its stock market returns. In certain specific situations, the two even show a negative relationship.

To illustrate this point more clearly, let's ignore tax factors and simply compare the historical returns of the U.S. stock market with those of other major global economies. The following data covers the average annual return and cumulative investment return over the past decade for each market.

First, we compare the overall performance of the U.S. market with that of "Emerging Markets" and "Developed Markets." Emerging markets include rapidly rising developing regions such as Brazil, India, and South Africa; while Developed Markets refer to mature markets outside the U.S., including Western Europe, Japan, South Korea, Australia, and Canada.

**Regional Performance Comparison:**

| Region | 10-Year Annualized Return | Cumulative Return |
| :--- | :--- | :--- |
| **United States** | **14.7%** | **295%** |
| Developed Markets | 8.7% | 130% |
| Emerging Markets | 8.2% | 120% |

The data clearly shows that, as a whole, emerging market stock returns significantly lag behind those of developed markets outside the U.S. This undeniable fact strongly refutes the common assumption that "higher GDP growth leads to higher stock market returns." At the same time, even within the developed market group, non-U.S. markets underperform significantly compared to the U.S.

Let’s do the math: If you had invested $100,000 in the U.S. stock market 10 years ago, you would now have $395,000. But if you had chosen to invest in developed markets outside the U.S., your portfolio would be worth only $230,000—about 58% of the U.S. return.

Even more disappointing is that if you had bet on high-growth emerging markets, you would end up with just $220,000—only 57% of the return from investing in U.S. stocks!

Some might argue that broad market categories may mask individual high-performing markets, dragging down the average. So let’s focus on a few specific countries of particular interest to Chinese investors, to see whether their individual stock markets can truly stand out.

**Performance Comparison of Major National Stock Markets:**

| Region | 10-Year Annualized Return | Cumulative Return |
| :--- | :--- | :--- |
| **United States** | **14.7%** | **295%** |
| Canada | 12.4% | 222% |
| Italy | 11.1% | 187% |
| France | 9.8% | 155% |
| South Korea | 9.5% | 148% |
| India | 8.8% | 132% |
| Australia | 8.0% | 116% |
| Germany | 7.9% | 114% |
| Singapore | 7.9% | 114% |
| Japan | 7.8% | 112% |
| United Kingdom | 7.7% | 110% |
| China | 5.4% | 69% |

From the table above, it is clear that even when competing individually, the U.S. market remains at the top. Take India as an example: if you had invested $100,000 10 years ago, you would now have $232,000—only 59% of the return from investing in U.S. stocks!

In conclusion, my position is clear: the U.S. stock market is undoubtedly the strongest stock market in the world!

Notably, the vast majority of companies in the S&P 500 Index are multinational corporations. On average, about 40% of their revenue comes from outside the United States. Therefore, investing in the U.S. stock market index essentially means capturing the benefits of global economic and population growth.

For this reason, I sincerely recommend: focus your investments on the U.S. market alone. There is no need to diversify into foreign markets under the guise of "risk reduction," as doing so will most likely reduce your overall investment returns.

There is a classic American saying: "If you can't beat them, join them!"

My ultimate investment advice is: cherish your life and wealth—go all-in on U.S. stocks! Abandon individual stock picking and invest only in index funds!

If you wish to learn more about my investment and financial management insights, please visit Amazon or Google Play Books to purchase and read my Chinese financial book "The Shortcut to Wealth," or its English edition "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

Google's market capitalization successfully broke through the $4 trillion mark!

The moment was frozen on January 12, 2026, when Google's market cap officially crossed the $4 trillion threshold.

Since Google chose to exit the Chinese market in 2010, its stock has surged by an astonishing 27 times!

During the same period, Baidu's stock increased by only 120%.