I never trade U.S. stocks, only investing in some index funds, because at ten o'clock every night, it's time to sleep.
I rarely pay attention to foreign exchange and gold, because the times when foreign exchange fluctuates greatly are also in the evening.
I will take a look at various data from the United States and Europe, but I won't pay attention to them at the first moment, still because I want to sleep well.
The aversion to the time difference in the investment market is innate.
Although occasionally I also sleep late at night, it is because of thinking about life, not to obtain information.
In my investment learning, sleeping a good sleep is really important.
In the past few years, I have noticeably increased the proportion of fund investment, especially index ETFs. Although the actual income is not as good as the psychological expectation, it is a bit worse than stocks, but it is still acceptable.
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Steady, with an average annualized return of more than 10%, it should be okay.
The core reason is still to sleep a good sleep.Investing on your own and buying stocks will almost always encounter minor issues every year.
For instance, a listed company may suddenly reduce its holdings, its performance growth may not meet expectations, or it may be affected by sanctions from abroad, and so on.
Nowadays, for leading technology companies, the investment is made with caution and not heavily.
For fear that upon waking up, some unexpected issue may arise.
It can be said that black swans will become more and more common in the future, far more than grey rhinos.
Buying funds does not mean there will be no explosions, but the risk of loss is much lower than that of individual stocks.
The registration system may be a good medicine for the private economy, but for retail investors, it is definitely a poison.
After all, the registration system will bring a mix of good and bad, making it hard to sleep.
The less strict the review of listed companies, the more likely it is to have problems, and the greater the risk.
Investing itself is about finding certainty in uncertainty, and those that are easy to cause sleepless nights, it's better not to invest.For individual investors, in a market where risks are increasingly high and the number of listed companies is growing, it is essentially inevitable to shift from individual stocks to ETFs; otherwise, one may easily be left with no skin to flay.
Investing in the market will inevitably go through three stages: the period of confusion, the growth period, and the stable period.
Period of Confusion: Searching for investment methods.
The first stage of stock trading must be a period of confusion, and everyone has come through this stage.
Entering the market with dreams, thinking that the market is easy to make money, only to find that the reality is far from the imagination.
Most investors are forever in the period of confusion, unable to break out.
This is because there are too many and too complex methods in the stock market, and learning is not that simple.
The period of confusion does not mean that one definitely does not make money, but one's investment ideas will keep changing, and it is very complicated to verify.
This stage is actually a trial and error stage, where it seems that there is a way, only to find out it is wrong.That is because the stages of the market are different, and the approaches of beginners often cannot cope with different market styles.
In the period of confusion, making money depends on luck, and losing money depends on strength.
Finding methods for success is a core aspect of the period of confusion.
Not only do you need to have confidence, but the key is to take action, and it is the kind of execution that is consistent with words and deeds.
The path that everyone ultimately finds in the stock market is different, and what it ultimately becomes is mostly up to oneself.
Growth period: Achieving a leap in returns.
If you can smoothly pass through the period of confusion, there will definitely be a stage where the returns are leaping.
This stage is called the growth period.
The growth period is a time when thinking and returns grow side by side.
My own real growth period was from 2019 to 2020. Although there were also rapid doubling of account assets before, it was obvious that I could not achieve real growth at that time.The growth phase can only be termed as such when the thought patterns, trading patterns, and profit models all develop together.
When you have a relatively stable and profitable model, and you have achieved good returns, coupled with a more mature market thinking pattern, it represents a significant leap forward.
The growth phase requires a substantial amount of time for contemplation; this is the core.
Profits are the result of your thoughts and actions, not the true value.
In the stock market, as long as your cognition is in place and your words and actions are consistent, making money is a reflection of cognition.
Apart from some cognitive systems, such as black swans and other forces beyond control, 80% of success comes from the profits within cognition.
The growth phase is when your cognition keeps up with the entire market and leads most other investors, making making money a natural consequence.
The stable phase: sleep soundly and solidly.
Finally, there is a stable phase, which is to minimize the fuss and reduce the probability of risk losses.
As investment progresses to later stages, there will be changes in the phase, from pursuing the rate of return to pursuing stable returns.Because the scale of funds has increased, the priority is no longer the return, but the risk, to avoid significant losses in the principal due to some mistakes.
Originally holding 2-3 stocks, now it has become 5-8 stocks.
Originally never paid attention to any ETFs, buying stocks is to buy the leader, now it starts to participate in index investment, looking for certainty.
You will be afraid and worried about those unknowns, affecting your overall investment.
It is not that investment is becoming more conservative, but it is unwilling to take risks and play high-risk games.
Sleeping soundly is a truly good investment.
True investment is not about winning from the game, but reflecting in value.
Value is beta, the game is alpha, and in the later stage of investment, you need to reduce alpha and seek more certain beta returns.
There is a saying, to give to everyone, the stock market is a microcosm of life in another world.The prerequisite for a good night's sleep is the achievement of profitability and the pursuit of its stability.
There is always uncertainty in stock investment, with wins and losses being inevitable.
What we have been exploring and thinking about for a long time is how to preserve profits and earn more while losing less.
The conclusion of most people is to increase their excess returns in the game, while my conclusion is to avoid significant losses in the fluctuations of the cycle.
In simple terms, most people always hope to catch a big bull in the rising cycle.
If the index rises by 30%, they can achieve a 100% increase.
However, in my view, it is correct to achieve more profits in the big cycle, but the core is to effectively avoid losses in the counter-cyclical period.
If the index falls by 30% and you only lose 10%, then the efficiency of capital accumulation will be much higher.
So, the core of what you need to do is to try to step on as few landmines as possible.
Do not touch stocks in a downward trend, do not participate in stocks with hidden performance risks, do not easily enter in the big cycle's decline, and do not try to catch the flying knife to make a rebound from the oversold game, and so on.Letting go of a competitive mindset is the foundation for making big money in the market, and it is also the essence of being able to sleep soundly.
If the pursuit of life is to have a good night's sleep, then what is the difference with investing?