The Mistake That Stock Market Investors Can't Make At Present

From the end of March to the end of April, the wave of China's stock market has been silent for more than 7 years, and it seems that a new era of universal stock speculation is coming again. A large number of new influx of small shareholders, and even the square dance aunt, no corresponding knowledge reserves, skills training, after entering the market all day worry about gains and losses, trembling with fear, often commit some basic mistakes. They are different from fund managers, who invest in life because they do not manage their own money and can deal with transactions more objectively and calmly.

But I believe that in the current market climate, if some basic mistakes can be solved, small scattered can also make a lot of money. So what are the most common mistakes among small shareholders?

The first mistake is not to look ahead, to look back, to think about the cost of history. We often see the small stock quilts, they start to carry, sit and turn red. This is the lowest mistake. Because once you buy, the cost has nothing to do with you. Economics calls it "sunk cost". What you care about is the market price of the stock in the future. If bullish continues to hold; if bearish, then run quickly, this is the common saying "cut meat", in fact, this is a "redundant meat". Similarly, if your shareholding cost is 1 yuan / share, and now it rises to 2 yuan, many investors will feel that 100% of their income is not greedy, they left. This is also wrong. What you should consider is: will the future rise to 3 yuan or will it fall back to 1 yuan?

All operations should be looked forward forever. Professional traders tend to lose more than a single share, such as 10%, and must go at once. This is certainly not the best option, because the market may still come back. This is an inevitable choice, because occupational investment is faced with the owners of funds. They are afraid of trading hands and playing with red eyes. They always want to recover their losses. The mentality of a "gambler" gambler is very dangerous.

The second mistake is too rational, ignoring the general trend. Economists emphasize rationality most, but researchers are increasingly finding that financial markets can not be 100% rational. The market has its own trend, and the trend is often irrational. So we often see that when the market goes down, you shout the throat, "my stock is valuable!" it's useless. How to do that? Once the bear market signal is clear, it should run immediately. bull market Already started, then we need to go all in one's strength, even if it falls to 5%-10% after the head is formed, it will eat more than half of the fish.

George Soros is the master of this game. Soros once told me that his stock speculation has never been bigger than that of a single stock. He keeps tracking research. Stock market The common mentality of the people. When most people think the prospect is good, the bull market is coming; when most people panic, the bear market will come. Soros Kungfu is always a turning point in judging bull bear in advance. I have made excessively rational mistakes myself. A few years ago, I thought that B shares were valuable, because B shares were much lower than A shares, and foreign exchange control would gradually relax. I believe A and B shares would be merged sooner or later. Accordingly, I selected a dozen B shares with low P / E ratio and set up a private small fund. In the middle of April this year, the B-share market was closed, but my strategy was not successful, because I bought it too early, and it cost too much time. When I was studying at Harvard, one of my thesis advisors, Summers and his supervisor, wrote an article that the participants in the financial market were mostly irrational or "stupid". They were the advocates.

The third mistake is probably the most common mistake made by square dancing mothers: the bull market has come into the market, and the bear market has come to dance. In the long run, we must lose more and win less. Old shareholders know the truth: stable returns are much better than big ups and downs! Financial management is a marathon, even if there are opportunities in bear markets. In addition, there are more financial instruments now, and they can also learn to be short. One of the biggest mistakes of many retail investors is emotional dominance.

If we say that the first lesson comes from the revelation from institutional managers, the second is the trick from Soros, and the third is the style of professional hedge fund managers. Hedge funds are always committed to investing, regardless of bear market or bull market. Their goal is to make money and maintain a healthy rate of return.