Taiwan Stock Market Plunges 2,000 Points, 0050 Drops to NT$97—Should You Buy Now? Financial Expert Warns: Avoid These 2 ETFs

Taiwan's stock market opened lower on the 28th and continued to decline throughout the day, closing with a massive drop of 2,030.83 points—the third-largest decline in Taiwan's stock market history. The main index settled at 41,603.36 points, down 4.65%, with trading volume surging to NT$809.482 billion. As the broader market corrected sharply, related ETFs also suffered losses. The benchmark stock Yuanta Taiwan 50 (0050) closed at NT$97.15, down 4.24% for the day.

Investors who bought at peak prices now face losses—can dollar-cost averaging help reduce costs?

Amid intense market volatility, many investors who entered at high levels are now under financial pressure. A netizen posted a trading screen on the social platform Threads, showing that the transaction price of 0050 had dropped to NT$97.75. The user revealed they originally bought shares at NT$108 per share and are now trapped in a losing position as prices continue to fall. They are considering switching to a regular monthly investment plan to lower their average holding cost and are seeking advice from other investors.

The post quickly resonated with other investors who bought at high prices. Many commented, sharing their own cost bases between NT$105 and NT$110. Some expressed frustration, saying, "I kept averaging down, but now I’ve run out of funds." However, others believe that since 0050 tracks the overall market performance over the long term, short-term price fluctuations are insignificant if the investment horizon is extended to three to five years. As long as they remain in the market and hold for the long term, there’s no need to panic excessively.

Market direction unclear? Why financial experts warn against 2x Bull and 1x Bear ETFs

In response to recent market turbulence, financial writer Shi Shenghui analyzed the situation on Facebook, noting that market sentiment is highly uncertain and opinions on the future outlook are divided. Some investors expect a strong rebound and are buying 2x leveraged bullish ETFs (2x Bull), while others believe the correction has just begun and are investing in 1x inverse ETFs (1x Bear). However, the market can only move in one direction, and investors who bet incorrectly will face significant losses.

Shi Shenghui warns that if investors cannot clearly predict market trends, they should avoid leveraged products like 2x Bull and 1x Bear. Instead, holding non-leveraged ETFs such as 0050 or 0056 allows for a more stable, long-term mindset when facing market volatility. This strategy enables investors to "hold during upswings and have cash available to buy during downturns." He emphasizes that all investments carry risk, and investors must make prudent allocations based on their personal financial situation and risk tolerance.