Worried About Inflation Anxiety? Here’s Why US Broad-Market ETFs Are Your Safe Haven

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Do you also feel like your salary can never keep up with skyrocketing prices? You look at your bills and feel anxious and powerless. Official data from Taiwan’s Directorate-General of Budget, Accounting and Statistics confirms this struggle: wage growth has indeed lagged behind inflation.

Yes, there is a simple and effective strategy to help you. That strategy is long-term investment in “US stock broad-market index ETFs.” This is not just an investment — it is your financial safe haven during an inflation storm and our top US stock recommendation category.

Key Takeaways

• US broad-market index ETFs are an excellent way to fight inflation, preserving and growing the real value of your money.
• Investing in US broad-market index ETFs is like becoming a shareholder in hundreds of the world’s top companies and sharing in their growth.
• US broad-market index ETFs have extremely low fees and provide maximum diversification, making your investment safer.
• Historical data shows that long-term investment in US broad-market index ETFs delivers strong returns and helps you build wealth.
• Dollar-cost averaging into US broad-market index ETFs with patience is the most effective wealth-building method for beginners.

US Broad-Market Index ETFs: A Solid Defense Against Inflation

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You might think keeping money in the bank is the safest option. During high inflation, that mindset can cost you dearly.

• Holding cash: Your purchasing power is eroded every day. Money that buys a cup of coffee today may only buy half a cup next year.
• Investing in the US broad market: Historical data shows that when inflation is moderate (averaging below 3%) and rising, US stocks beat inflation 90% of the time.

While stock performance can be unpredictable in the short term during high inflation, over the long run, putting money into growth assets is the smart way to protect your wealth. US broad-market index ETFs are an outstanding recommendation precisely because they offer three rock-solid advantages.

Ride the Growth Train of Global Leading Companies

Investing in a broad-market index ETF that tracks the S&P 500 means you instantly become a shareholder in hundreds of the world’s best companies. You are no longer just a consumer — you are a participant and beneficiary of their growth.

The iPhone you use every day, the Windows operating system on your computer, the Amazon website you shop on — the companies behind them (Apple, Microsoft, Amazon) are all S&P 500 constituents. These companies are not just huge; they have powerful business models that drive continuous profit growth.

Their success is no accident. They know how to transform — from PC software giants to cloud-first leaders, from online bookstores to everything-store tech behemoths. Investing in an S&P 500 ETF means betting on their innovation and future value — essentially boarding the fastest train of human progress.

Additionally, America’s ongoing demographic dividend provides long-term economic support. Unlike many developed countries facing aging and shrinking populations, the US benefits from continuous immigration, injecting vitality into the labor market. This momentum will continue to support long-term corporate growth and solidify the foundation of your investment.

Enjoy Ultra-Low Costs and Maximum Diversification

If you tried to buy all 500 S&P 500 stocks individually, you would need enormous capital and face prohibitive transaction costs. Index ETFs have completely changed that.

1. Ultimate Risk Diversification

Don’t put all your eggs in one basket — you already know this principle. The biggest risk of individual stocks is “single-company risk” — if that company fails, your investment can go to zero.

Index ETFs hold hundreds of securities, dramatically reducing unsystematic risk. Even if a few companies underperform, growth from the rest offsets losses, keeping your portfolio growing steadily. This is the core reason we rank these products as our top US stock recommendation.

2. Shockingly Low Management Costs

Active funds are run by managers who charge higher fees. Yet data shows that over the long term, most active funds fail to beat the market. Index ETFs are passive tools that simply track an index, so management costs are minimal.

Lower fees mean more returns stay in your pocket. Saving 0.5%–1% per year seems small, but compounded over decades the difference becomes enormous.

Historical Returns Prove Their Inflation-Fighting Power

Talk is cheap — let’s look at the data. The S&P 500 has survived the Great Depression, two world wars, oil crises, the dot-com bubble, and countless other tests since 1926.

Its long-term annualized return is approximately 10%.

Even after adjusting for inflation, the real annualized return is 7.0%. This means your wealth grows far faster than inflation erodes it over time. Markets in Taiwan or Europe rarely match this long-term performance.

This is why we say that when facing short-term market volatility, what you need is not panic but patience. History has repeatedly proven that as long as you hold for the long term, the growth curve of the US broad market will smooth out the bumps and carry you to financial abundance.

In summary, thanks to world-class companies, rock-bottom costs, and historically validated strong returns, US broad-market index ETFs are undoubtedly the most trustworthy safe haven when fighting inflation anxiety.

Take Action Now: Build Your US Broad-Market ETF Portfolio

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Knowledge brings peace of mind, but only action changes your financial future. Now let’s turn the plan into reality step by step and build your inflation-resistant assets.

Beginner US Stock Recommendations: Popular S&P 500 ETFs

When you decide to invest in an S&P 500-tracking ETF, you’ll find several popular choices, the most well-known being SPY, IVV, and VOO. They all track the same index and deliver nearly identical long-term returns, but differ in details that directly affect long-term costs.

For long-term investors, the expense ratio is the number to watch. A 0.06% difference seems tiny but compounds significantly.

Example with $100,000 invested:

• SPY: ~$94.5/year in fees
• VOO or IVV: only $30/year

For buy-and-hold investors, VOO and IVV are clearly the more cost-effective choices. Their ultra-low fees ensure more profit stays with you and maximize compounding. This is why they are our top US stock recommendations.

Two Ways to Start Your Investment Journey

After choosing your ETF, the next step is opening an account. Taiwanese investors mainly have two options to buy US index ETFs:

1. Local broker complex order (複委託): Place orders through your familiar Taiwanese broker, who executes trades in the US market for you.
2. Overseas broker: Open an account directly with a US online broker and handle everything yourself.

Each method has pros and cons — choose based on your needs.

How to choose?

• If you’re a beginner and want everything in Chinese and don’t mind higher fees for convenience, start with local complex order.
• If you’re committed long-term, willing to learn, and want minimum cost and maximum functionality, open an overseas broker account. The initial wire fee is quickly offset by years of lower trading costs.

Opening an overseas brokerage account is simpler than you think — usually fully online:

1. Choose a broker and fill out the online application (personal, financial, employment info).
2. Upload ID (passport) and proof of address (utility bill).
3. Complete the W-8BEN form (non-US resident tax status — qualifies you for lower dividend withholding tax).
4. Wire funds from your bank to the brokerage account and start trading.

Build the Right Long-Term Investing Mindset

Tools and accounts are ready, but your ultimate success depends on your mindset. Remember these three principles — they are your anchor through market storms.

Principle 1: Embrace Discipline, Abandon Market Timing

Many try to “buy low, sell high,” but historical data repeatedly proves timing is futile. Vanguard research shows that 70% of annual market returns can come from just a handful of days. Missing those days devastates long-term returns.

Instead of guessing, adopt dollar-cost averaging.

What is dollar-cost averaging? It’s automated investment discipline. You set a fixed amount (e.g., $300) to invest on a fixed date (e.g., the 5th of each month) regardless of price.

• When prices are low → you buy more shares.
• When prices are high → you buy fewer shares.

Over time, this lowers your average cost and removes emotional decisions driven by fear or greed. It is extremely effective for long-term wealth building and the best beginner US stock strategy.

Principle 2: Treat Market Declines as Gifts, Not Disasters

When headlines scream “crash” or “bear market,” fear is natural. But as a long-term investor, train yourself to see downturns differently. Every dip means you can buy more high-quality assets at cheaper prices.

Historical data makes this clear:

From the chart, whether it was Black Monday 1987, the 2008 financial crisis, or the 2020 COVID crash, strong rebounds and rich rewards followed sharp declines. As long as you stay invested, history shows that no 20-year period in the S&P 500 has ever lost money.

Patience is your strongest weapon. When others sell in fear, that’s your best time to accumulate via dollar-cost averaging.

Principle 3: Never, Ever Use Leverage

This must be said with utmost seriousness. Leverage (borrowed money) is a double-edged sword that magnifies gains — but magnifies losses even more disproportionately.

🚨 Risk Warning: When using leverage, brokers can force-liquidate your positions if your account value falls below a certain level to recover the money they lent you. This is called a “margin call” and can happen in a single violent move, leaving you no chance to wait for recovery.

Even a modest market drop can be catastrophic for a leveraged account. The 2022 UK gilt crisis is a brutal example — leverage triggered a death spiral that instantly bankrupted institutions. Remember: steady wealth comes from time and compounding, not gambling.

Facing rising prices, stop worrying and start acting. The core message of this article is simple: consistently dollar-cost averaging into US broad-market index ETFs is the most effective way to build a solid financial defense. Time is your most valuable asset, the power of compounding lets every dollar work for you, earning interest on interest.

Don’t let inflation anxiety erode your future. Start today — let your money work for you and sail safely through this inflation storm.

FAQ

The US market is at all-time highs — is it still okay to invest now?

Absolutely. For long-term investors, the best time to start is “now.” Use dollar-cost averaging to invest regularly. This buys less when prices are high and more when prices are low, naturally lowering your average cost without worrying about entering at the peak.

Do I need a lot of money to invest in US broad-market ETFs?

Not at all! This is the beauty of index ETFs. You can start with as little as a few dozen dollars through most brokers. The key is to start and keep investing consistently — not the initial amount. Your wealth will grow gradually over time.

Will I have to pay a lot of tax on US ETF profits?

Good news for Taiwanese investors: capital gains from selling stocks are tax-free. The only tax is the 30% withholding on dividends, which the broker automatically deducts — very simple.

Are US broad-market index ETFs completely risk-free?

No investment is risk-free. The biggest risk with broad-market ETFs is short-term market volatility. But history shows that if you hold for 10+ years, the probability of loss is extremely low. Your biggest enemy is not the market — it’s selling in panic.