The moment when the dream of passive income shatters: Can investing in stocks truly ensure a secure retirement? The risks that influencers didn't mention

Saving stocks in Taiwan is hyped up as if it were a divine miracle, as if just buying a few stocks can achieve financial freedom. But reality is often more brutal than marketing copy—you’ve heard of people making millions through saving stocks, and you’ve also heard of others getting trapped and losing everything. What is saving stocks? Simply put, it means buying stocks and holding them long-term, waiting to receive dividends. It sounds simple, but in practice, there are more pitfalls than you might think.

Today, let’s bust some myths about saving stocks, examine the fatal flaws of this investment approach, and see if you are the “destined” person to get rich through it.

Does saving stocks really earn steadily? First, look at this painful case

Many people imagine saving stocks as: buy good stocks, receive dividends regularly, and make money even while sleeping. But the blockbuster hit of 2021 (3373) brutally shattered this illusion.

That year, the stock paid a dividend of 10 yuan, with a yield over 15%, making it a “hot item” among saving stock enthusiasts. But the stock price plummeted from 70 yuan to 22 yuan. Do the math: even if you received the dividends, the loss from the price difference far outweighs it. What is saving stocks? Here, it has become synonymous with “earning dividends, losing on price difference.”

This is why saving stocks is not capital-protected—it’s not just putting money in the bank, but genuine investing, with all the risks that come with it.

The advantages of saving stocks are undeniable, but the disadvantages are equally deadly

Benefits of saving stocks

First, it must be acknowledged that saving stocks do have attractive points:

• Time and effort saving: after choosing the right stocks, you can set up automatic deductions, no need to watch the market all day, nor master technical analysis
• Stable dividends: companies with good performance will pay dividends regularly, providing relatively stable cash flow
• Potential for stock appreciation: besides earning dividends, there’s also the chance to profit from stock price increases
• Resistance to short-term volatility: long-term investment characteristics help you avoid being scared by daily market fluctuations
• Shareholder rights: holding stocks means becoming a company shareholder, enjoying corresponding rights

Four major fatal flaws of saving stocks

1. Capital risk is everywhere

Without capital protection, saving stocks turn from a “retirement plan” into a “gambling game.” Stories of earning dividends but losing on price difference happen every day.

2. Funds are trapped

Once invested, it’s hard to access the money at will. When urgent needs arise and stock prices are low, you either sell at a loss or grit your teeth and wait. You can’t get the dividends, and you might get trapped.

3. Stock selection is too challenging

Because holding stocks is “easy” in the long run, the pressure of choosing stocks early on is high. You need to understand fundamental analysis, evaluate company prospects, and judge valuation—it’s not enough to just look at yield.

4. Short-term returns are minimal

The advantage of saving stocks is fully realized over the long term. In the short term, market fluctuations and emotional swings dominate stock performance, making returns unstable and hard to predict. If you want to double your money in a year, saving stocks is definitely not the choice.

Are you the type of person suitable for saving stocks?

Saving stocks is not a universal solution; the right candidates have clear characteristics:

✓ Have idle funds and can hold long-term

This is a basic requirement. If your money might be needed in the short term, do not use it for saving stocks. Be mentally prepared to “not touch it for over three years.”

✓ Have a stable mindset

Don’t panic during market volatility, be able to tolerate stock price rises and falls, and not be swayed by emotions—such investors are suitable for saving stocks. Those with fragile psychology who want to escape at the first sign of loss are not.

✓ Low risk tolerance but can accept long-term relative returns

If you want high returns by chasing peaks but are afraid of losses, saving stocks is a good compromise. But only if you can truly hold for the long haul.

✓ Have basic analysis skills or willingness to learn

At least be able to read financial reports, understand company prospects, and judge when to buy or avoid. Otherwise, consider ETFs, which are a safer route.

How to choose the right saving stock targets?

If you decide to take the saving stocks route, choosing the right stocks is half the success.

The allure and traps of financial stocks

Bank stocks and insurance stocks offer high dividends and relatively stable profits, regarded by saving stock enthusiasts as “safe havens.” But “not going bankrupt” doesn’t mean “will rise,” and choosing the wrong entry point can still trap you.

The relative safety of leading stocks

Industry leaders are usually well-managed and pay stable dividends. If you want both dividend income and capital gains, leading stocks are a good entry point.

ETFs are the true friends for beginners

Yuan Da high-dividend ETF (0056), Yuan Da Taiwan 50 ETF (0050), and similar ETFs hold a basket of stocks, helping you automatically diversify risk. Compared to picking individual stocks, ETFs are much easier to operate and more suitable for beginners.

Four tips to avoid common pitfalls in saving stocks

1. Don’t be careless in stock selection

Beginners should start with ETFs to get familiar, then pick individual stocks. Don’t be blinded by high yields.

2. Distinguish between “saving money” and “investing money”

Don’t touch money you’ll need in the next three years. Set aside emergency funds and living expenses; only idle funds should be used for saving stocks.

3. Choose platforms carefully

Not only must they be legitimate and compliant, but also compare transaction fees and deposit/withdrawal convenience. Don’t save a little on fees only to get caught by platform charges.

4. Mindset adjustment is crucial

Saving stocks is not “lying down and earning,” but “patiently waiting.” Set realistic expectations and don’t expect to get rich overnight.

Conclusion: Saving stocks is not the only way to freedom

Saving stocks is indeed a feasible investment strategy, but it is not a guaranteed foolproof way to get rich. Market volatility, company performance uncertainties, and stock selection difficulties—these are unavoidable issues.

What is saving stocks ultimately boils down to a risk-reward trade-off. Instead of blindly following trends, tailor your investment portfolio based on your funds, risk tolerance, and goals. Diversify, allocate assets across different types, and keep learning—these fundamentals are the real keys to achieving financial freedom.