Why Buy US Stocks? The Stabilizing Force in Market Fog at the End of Summer 2026: How Hong Kong and Taiwan Funds Are Using ETFs to Invest in Core US Assets

At the juncture of August 14, 2026, global capital markets stand at a delicate crossroads. For investors based in Hong Kong and Taiwan, facing the volatility of local markets and the uncertainty of the global macroeconomy, a familiar yet ever-relevant question resurfaces: Why buy US stocks? As the Federal Reserve releases clearer policy signals ahead of its semi-annual meeting in the latter half of 2026, the market is gradually pricing in expectations of a "soft landing." However, geopolitical friction and the slow pace of regional economic recovery cause capital to refocus on the US stock market across the ocean when seeking safe havens. This article will analyze the core logic of investing in US stocks from the perspective of Hong Kong and Taiwan investors, based on the current market environment, and provide practical cross-border allocation strategies. I. Macro Outlook: The "Certainty Premium" That Transcends Cycles In the summer of 2026, global investment themes are undergoing a profound shift. If the past two years were a struggle between "anti-inflation" and "high interest rates," the current keywords are "interest rate cut expectations" and "earnings realization." Against this macroeconomic backdrop, the US stock market exhibits a unique appeal. This appeal stems not merely from index gains, but from its deep-seated structural advantages. First, the profitability of American corporations remains leading globally in 2026. Although the market previously worried about overvaluation, the sequential release of Q2 earnings reports from S&P 500 constituents reveals that many leading companies have successfully weathered economic slowdown pressures through cost control, AI enablement, and global expansion. This earnings resilience provides a solid fundamental support for stock prices, which is the most direct answer to "Why buy US stocks." Second, the "safe-haven attribute" of US dollar assets is particularly precious amid the current turbulent international situation. For investors holding Hong Kong Dollars (pegged to the USD) and New Taiwan Dollars (with large foreign exchange reserves), allocating to US stocks is essentially an effective means to hedge currency fluctuations and lock in purchasing power. Especially as global central bank monetary policies diverge, the stability of a US dollar asset portfolio becomes the ballast for preserving and growing family wealth. II. Industrial Depth: Revaluation from "Computing Power Armament" to "Application Implementation" Looking back over the past two years, the explosive growth of AI computing infrastructure was the core engine of the US stock bull market. However, as we enter the latter half of 2026, the market's narrative logic is subtly changing. Investors are moving beyond mere hardware stacking to focus on whether AI technology can truly translate into corporate cash flow and profit. This evolution in industrial logic offers new entry opportunities for investors. 1. The "Moat" of Tech Giants Remains Solid Although the "Magnificent 7" experienced valuation pullbacks recently, this does not signal the end of the tech stock trend. On the contrary, it is a healthy process of weeding out the weak. Tech giants, represented by Nvidia, Microsoft, and Google, are converting massive capital expenditures into tangible SaaS revenue and cloud service growth. For Hong Kong and Taiwan investors, these companies not only represent the cutting edge of global technology but are also the best vehicles for sharing the dividends of global digital economy growth. 2. The Revival of Biotech and Healthcare Besides the technology sector, another undervalued highlight in the US stock market in 2026 is biotechnology. As expectations of an interest rate cut from the Federal Reserve heat up, the biotechnology sector, which relies on financing innovation, is entering a period of valuation recovery. The sustained growth of GLP-1 drugs and clinical breakthroughs in gene editing all signal explosive growth for this sector in the coming years. For cross-border capital seeking high elasticity, this is a battlefield that cannot be ignored. 3. Hidden Champions of Traditional Industries Do not forget the industrial and consumer giants in the US stock market that have been around for centuries. Against the backdrop of supply chain restructuring, domestic manufacturing policies in the United States have benefited a number of core industrial enterprises. At the same time, consumer stocks with strong brand moats have shown surprising pricing power during the inflation downturn. These representatives of the "old economy" often provide stable dividend returns, forming a perfect hedge against volatile technology stocks. III. Practical Strategies from Hong Kong and Taiwan Perspectives: The ETF Toolbox and Allocation Art Having understood "why to buy US stocks," the next question is "how to buy." For investors from Hong Kong and Taiwan, while directly opening a US stockbroker account is feasible, using ETFs (Exchange-Traded Funds) for allocation often achieves cross-border positioning with lower costs and higher efficiency. 1. Localized Application of Core-Satellite Strategy When building a portfolio, we recommend adopting the "Core-Satellite" strategy. The Core portion should account for 60%-70% of the position, mainly allocated to ETFs that track major indices, such as SPY (S&P 500 ETF) or VOO (Vanguard S&P 500 ETF). These products offer the broadest market exposure, ensuring that investors do not miss out on the overall upward dividend of the US stock market. The Satellite portion can be more aggressive, accounting for 30%-40% of the position. For example, allocating to QQQ (Nasdaq 100 ETF) to seek excess returns from technology stocks, or allocating to XBI (SPDR S&P Biotech ETF) to bet on a turnaround in the healthcare industry. For investors who are bullish on the recovery of US industry, XLI (Industrial Select Sector ETF) is also a good choice. 2. Overcoming "Fear of High Prices": Dollar-Cost Averaging and Rebalancing Many investors from Hong Kong and Taiwan often experience "fear of high prices" when facing continuously rising US stock indices, worrying that buying at this time will result in being "trapped at the peak." However, historical data tells us that predicting the short-term top or bottom of the market is futile. A more rational approach is to use the Dollar-Cost Averaging strategy to smooth the cost basis. Furthermore, dynamic rebalancing is crucial. When the rise in technology stocks is too large, leading to portfolio imbalance, appropriately taking profits and increasing holdings in defensive sectors (such as consumer staples or utilities) can both lock in gains and control portfolio volatility. This disciplined operation is the key to long-term investment success. 3. Focusing on Exchange Rates and Tax Costs Although the Hong Kong dollar is pegged to the US dollar, the exchange rate risk is relatively small. However, for investors using the New Taiwan Dollar, exchange rate fluctuations can erode investment returns. Therefore, risk management can be considered using forward contracts or currency hedging ETFs when necessary. In terms of taxation, investors from Hong Kong and Taiwan typically need to pay attention to dividend withholding tax when investing in US stocks. Utilizing Hong Kong ETFs that hold US stocks (such as 3033.HK, 3035.HK, etc.) or beneficial certificates from Taiwan can sometimes offer certain conveniences in tax reporting. However, it is always wise to consult a professional tax advisor before making a decision. IV. Risk Warning: Hidden Reefs in the Fog Although we emphasize the value of allocating to US stocks, blind optimism is also a major investment mistake. During the remainder of 2026, investors must be wary of the following major risk points: * **Uncertainty in the pace of interest rate cuts:** If US inflation data shows fluctuations and the Federal Reserve delays rate cuts, it may lead to tightening market liquidity and trigger valuation corrections in growth stocks. * **Geopolitical Black Swan events:** Political polarization during global election years and escalating trade frictions could instantly impact market sentiment, leading to sharp short-term volatility. * **Risk of AI bubble burst:** Although the long-term prospects of AI are bright, if short-term application implementation falls short of expectations, overheated speculation could trigger sector-wide deep adjustments. V. Conclusion: Be Friends with Time Returning to the initial question, "Why buy US stocks?" The answer may not lie in the daily gains or losses, but in the economic vitality, innovation mechanism, and capital efficiency it represents. For investors from Hong Kong and Taiwan, US stocks are not just a trading market; they are a window to global wealth growth. In this era of uncertainty in 2026, by employing scientific asset allocation and utilizing high-quality ETF tools to deeply position core US assets, we can not only capture the era dividends brought by the AI revolution but also build a solid defense line for the long-term inheritance of family wealth. Investing is a marathon; rather than worrying about short-term fluctuations, it is better to embrace the long-term trend of US stocks and be friends with time.