Recently, many people have been discussing stock investments, but concepts like listing, OTC, and emerging markets are still confusing. Actually, understanding these differences can greatly impact your investment decisions. Today, I’ll help clarify them for everyone.

First, let’s start with the simplest definitions. Listing refers to a company being listed on major exchanges like the Taiwan Stock Exchange (TWSE) or the New York Stock Exchange (NYSE) and NASDAQ in the U.S. OTC (Over-the-Counter) trading occurs on the OTC Market Center (TPEx), which has a different trading method, mainly through broker-dealer transactions. Emerging markets are even more special; usually, these are companies that don’t yet meet OTC listing requirements but want to raise funds and build brand awareness during a transitional phase.

The main difference among these three is the level of regulation and risk. Listed companies are the most mature, like industry leaders TSMC and MediaTek. They have the highest financial transparency, the largest trading volume, and relatively smaller volatility. For beginners, starting with listed stocks is the safest choice.

OTC companies are relatively younger, often growth or mid-sized firms. The entry barriers are lower than for listed companies, so there are more opportunities. However, their volatility is higher, and liquidity isn’t as good. This market is suitable for investors with some experience who are willing to accept moderate risks.

Emerging markets are the playground for high-risk players. They include startups, biotech firms, and newly established companies with promising themes. The craziest part is there are no price fluctuation limits, so stock prices can double or halve within a day. Additionally, trading volume is very low, so you might not find buyers when you want to sell. Financial transparency is also the worst. Honestly, I don’t recommend beginners to get involved in this.

After explaining the differences between listing, OTC, and emerging markets, let’s look at how to buy. Listed stocks are the simplest; just open an account with a securities firm in Taiwan. For U.S. stocks, you can use overseas brokers or a custodian account. OTC stocks are similar but require placing orders through a broker. Emerging market stocks are a bit more complicated—they require confirming that your broker has OTC trading qualifications, then activating the feature either at the branch or online, and signing a risk warning agreement. Once enabled, you can only trade spot stocks; margin trading and short selling are not allowed. You must buy at least one lot (1,000 shares), and trades are negotiated rather than automatically matched, so execution is slower with large price swings.

In terms of investment returns, listed stocks have averaged about 10% annual return over the past 30 years, far surpassing bank deposits and government bonds. Many listed companies also pay dividends regularly, providing passive income. Moreover, stock market returns generally beat inflation. According to U.S. Bureau of Labor Statistics data, the S&P 500 has an approximate return of 10%, and the Dow Jones about 8.7%, both easily outpacing rising prices.

But risks also exist. The stock market can fluctuate sharply, causing losses of over 10% in a short period, which is common. Investing also requires time for research—reviewing financial reports, following company news, and learning fundamental and technical analysis. For busy professionals, this can be quite costly.

The advantage of OTC stocks is the broader trading scope. Some companies listed overseas prefer not to secondary list in the U.S. and choose OTC markets, giving investors more options. Also, stock prices are relatively cheap; a stock priced at $1 can rise to $1.50 for a 50% return. The downside is limited regulation, minimal disclosure from companies—especially in the pink market where almost no information is released—and high risk. Plus, with low trading volume, you might face situations where you want to sell but can’t find a buyer, and the bid-ask spread can be large.

If you’re a new investor, my advice is to start with listed stocks. First, assess how much capital you can invest—don’t put all your assets into the market. Then, spend time doing homework: read financial reports, listen to analyst opinions. Most importantly, set clear investment goals and don’t be scared by daily news or short-term fluctuations. With goals in mind, you won’t be easily swayed by market noise.

Once you gain some experience and understanding of listed stocks, consider moving on to OTC markets. As for emerging markets, unless you are very familiar with individual stocks, can judge financial authenticity, and have spare funds to withstand extreme volatility, I really don’t recommend trying them casually. The purpose of investing is to grow your capital steadily, not to get rich overnight through gambling.