An Empirical Study of Diversification in Investment Using the Taiwan Stock Market and the S&P 500

• Main Authors: Yuan-Chen Mai, 麥苑貞
• Other Authors: Chao-Yen Wu
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/85112736584784236449

碩士 === 義守大學 === 資訊管理學系碩士班 === 95 === The stock is one of the main investment tools for Taiwan. TAIEX has downgrading from 12495.34 on 10th, 20, 1990 to 2560.47 on 1st, 10 in the same year. The value of the investors was decrease sixth. TAIEX has grown in 2003 and was supposed to be 9000. However, the behaviors of investors in Taiwan are still opportunities. Investor invest Taiwan stock market by short –term way. The main investor object is electron sector. TAIEX is the only market the investors have invested. Taiwan stock market accounts for the world stock market weight less than 1%, but USA of stock market, which is the global greatest capital market, occupies the world stock market 48.30%. The USA S&P500 index (Standard & Poor '' s 500 index) is composed of 500 the representative enterprises which have the leadership of USA market and the most important reference norm index for investor who comments the quantity operation achievements. Therefore, this research uses the Taiwan weighting stock price index and the USA S&P500 index to study the performance. There are 5,648 transactions dates in the Taiwan stock market and 5,152 transactions dates in the USA stock market over the 20 years period respectively. This report was work out accumulation return on assets and risks of the undulate for a day, a month, a quarter, a year, analysis the achievement on TAIEX and S&P500 and proves the affection on long-term or short-term investment and the risks of the undulate by different period, which are from 1,3,5,10,15,and 20 years. There are seven important conclusions of this research:: 1. The investor is a winner as long as the holding period of the investment is long enough no matter what time gets into the stock market. 2. It is relative between the rise or down on TAIEX and the over-buy or over-sell by foreign capital. Thus, the investors in Taiwan have to pay attention to where foreign capital moving on. 3. Foreign capital has increased money into the TAIEX and has more influence with TAIEX day by day in 14 years. It helps the degree of globalizes in Taiwan grow every year. 4. Although the risk of TAIEX is more then deposit account, you will beat the return of deposit account, if you have held stock for 18 years. 5. The average accumulation return on assets, which is holding stock for 18-20 years in TAIEX, is better than S&P500. The average accumulation return on asset, which is holding stock for 10-17 in S&P500, is better than TAIEX. 6. The investor invests in the international market, not only enjoys a higher reward rate, but also can enjoy to the smaller risk profit. 7. The investor who enter the market when bubble economy peak had been through repeatedly for several years. They are still unable to make a profit. It is obviously that the bubble economy was profound to investor''s influence. The results of this study be hoped to provide some contributions and help the Taiwanese in the selection of their investment portfolio.