||In recent years, the starting salary is low in Taiwan. The growth of GDP（Gross Domestic Product）doesn’t trigger the growth of salary. In addition, the time deposits rate drops and the CPI (Consumer Price Index) annual growth rate is higher than time deposits rate. Therefore, if people only rely on time deposit as investment tool, their wealth will shrink gradually. As a result, they seek for other investment tools. However, they usually encounter problems when making an investment, such as, lack of money, lack of time, lack of knowledge and risk avoidance issues. The purpose of this study is to provide people who have no time and professional finance knowledge with an easy and low risk investment way.|
The study consist two parts. The First part uses DCA (Dollar-Cost Averaging) to buy 0050 ETF, and the second part uses 7 financial indexes to select stocks then uses DCA to buy these stocks. The empirical results as following: (1) either in a bull market or bear market, the return on investing 0050 ETF is better than time deposits rate in a long term (5 years), (2) there are 9 stocks which meet the 7 financial indexes. And the average return of the 9 stocks is progressive decrease in 5years. First three years are higher than 0050 ETF, after that, the return are lower than 0050 ETF.
Base on the results of this study, there are some suggestions for investors: (1) for long term (5 years) investors, the easiest investment way is buying 0050 ETF by using DCA. DCA is a good way to reduce risks and get a higher return than time deposits rate in a long term. (2) for short term (1 year) investors, to use financial indicator to select stocks and investing by using DCA can get excess return. It’s best to set the investment time as 1 year or no longer than 3 year for risk controlling and best ROI (Return On Investment).