For Dorian Hsu, Taiwan’s stock boom had looked like a chance to get ahead. The 33-year-old office worker poured his savings into stocks and borrowed $62,000 through an unsecured loan to double down on leveraged bets tied to the benchmark index.
Little is he concerned about facing years of loan repayments, after racking up more than $150,000 in losses in July. If anything, the experience has only strengthened his resolve. “I’m looking for a chance to strike it rich, so I gotta go all in,” he said, adding that he would continue to look for chances to invest with his salary.
Across Taiwan, retail investors such as Hsu have embraced a deep conviction that the island’s world-leading semiconductor industry will continue driving wealth creation for years to come. That faith was tested last month, when the Taiex slid 6.5% and at one point headed for its worst monthly decline since 2008. Yet many traders held on and even added to positions, according to brokers familiar with money flows. Official data show the number of retail buyers in Taiwan Semiconductor Manufacturing Co. and a closely watched ETF surged during the selloff.
The downturn had triggered a sharp increase in margin calls, with some brokerages handling hundreds of cases within days, the sources added. Even so, forced liquidations remained limited as most investors posted additional collateral rather than exiting positions.
The can’t-lose mindset is rooted in Taiwan’s remarkable stock run. Fueled by artificial-intelligence heavyweights like TSMC, local shares have climbed roughly 25% every year from 2023 through 2025, turning investing into a national pastime. As a result, many investors see the recent global tech selloff as a blip rather than a decisive break in the bull market, with the benchmark still up 54% this year despite the recent slide.
“Retail investors have shown little sign of panic selling in Taiwan equity ETFs,” said Jimmy Yu, who leads ETF and mutual fund product strategy at Cathay Securities Investment Trust. “Instead, they’ve adopted a ‘buy-the-dip’ mentality.”
The result has made Taiwan something of an outlier in the recent tech selloff. In South Korea, leveraged bets in single-stock exchange-traded funds unraveled as forced selling intensified the downturn, contributing to a 22% plunge in the Kospi in July. By contrast, strong conviction in local firms, ample liquidity, a lack of risky single-stock leveraged products and limited forced liquidations helped cushion Taiwan’s decline.
Signs of that resilience are evident in ownership data. The number of TSMC odd-lot shareholders, or investors holding fewer than the standard 1,000-share trading unit, rose to 2.5 million by the end of last month from about 2.3 million in June. Small shareholders in Yuanta’s Top Taiwan 50 ETF — the island’s biggest with over $70 billion of assets under management — also grew by more than 100,000 in July, according to data from Taiwan Depository & Clearing Corp.
Exchange data also show that asset managers in Taiwan added to their positions in July even as foreigners offloaded the second most amount of stocks on record.
Investors like 29-year-old Candy Tseng, who works at a software company, believe that the best outcome during market volatility is holding on. “I was hurt very badly last year during the Trump tariff selloff – had close to NT$1 million in paper loss and was trapped in my underwater positions,” she said. “But as the market eventually surged all the way through 2026 – until recently – I’ve made all the money back.”
Recent market swings have drawn the attention of regulators. Over the past two weeks, the Financial Supervisory Commission met with brokers to inquire about risk-management measures, after earlier consultations with banks on loan conditions, according to people familiar with the matter, asking not to be identified as the information isn’t public. The FSC declined to comment.
One tactic brokers have adopted is sending early notices to investors when the value of their collateral drops to 1.5 times what they owe, sources said, compared to the legal threshold of 1.3 times. This allows them to shore up their accounts before a formal margin call is triggered.
Some brokerages have also instructed sales staff to closely monitor clients’ portfolios and leverage, flag risky accounts and, where necessary, reduce credit limits.
Leverage has fallen about 20% from its peak, leaving outstanding margin loans at a modest 0.6% of free float, according to a Aug. 3 Goldman Sachs Group Inc. sales and trading note. Even so, “material, sticky inflows” into domestic equity ETFs persist, it said, indicating investors prefer broader exposure rather than concentrating on single stocks.
The FSC on Tuesday said the Taiwan Stock Exchange plans to launch a dashboard by the end of September that will display key leverage indicators, including outstanding margin loans, collateral margin ratios, securities lending used for short selling and unrestricted-purpose loans, to improve transparency and risk monitoring.
For many retail investors, though, the message is the same. Dorian Hsu says he’s 90% sure that the Taiex will rise to 50,000 mark by the end of 2027 — 12% higher than Wednesday’s close. “With Taiex these days, you see so many people make a fortune from the market and naturally, you think, I want that too.”
This article was generated from an automated news agency feed without modifications to text.
