Firstly, this article is not aimed at Lao Hu. I intend to use Lao Hu's investment case to guide those new stock market investors, to tell them what operations are wrong and what are correct. The purpose is to help those investors who are willing to study hard and have insight to take fewer detours in investment and to embark on the broad road of investment as soon as possible.
From Lao Hu's stock trading records in the past few days, it is clear that he has made two major mistakes:
1. Engaging in medium to long-term investment with short-term trading techniques
Lao Hu said he went to Laos. It is inconvenient to watch the market while being abroad, yet he still engaged in stock trading. What is this? This is obviously a short-term trading technique. As a long-term investor, there is no need to rush. Since it is inconvenient to invest while on a business trip, just don't buy for now! It's not too late to buy after returning home. Lao Hu's eagerness to buy stocks indicates his impatience, which reflects, from a certain perspective, his eagerness to make money and his belief that the stock market trend will start immediately.
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This is a short-term speculative mentality. Lao Hu seems to have expressed his intention to engage in medium to long-term investment, but now his short-term trading mentality clearly deviates from his original intention of medium to long-term investment.
For new stock investors, my advice is not to rush to trade. In the decades-long investment career, a few days don't matter. Investment is important for stability, not speed. Do not trade before reading the company's recent annual report and announcements, do not trade without a good trading environment, and do not learn from Lao Hu! Being abroad and still eager to trade. Do not trade without thinking about a way out.
2. Rushing into the market without a detailed investment plan
Looking back at Lao Hu's process of buying stocks, it is obvious that he did not have a detailed investment plan. He first invested 100,000 yuan, and after one or two days, he invested another 100,000 yuan. Moreover, he bought stocks today, two, and then two more in a few days. So far, Lao Hu has bought five stocks and two funds in bits and pieces. This is clearly the pace of feeling the stones while crossing the river.
This way of buying stocks indicates that Lao Hu's investment lacks a meticulous and detailed investment plan. The correct investment should be to determine the total amount of capital to be invested, the total number of stocks to be bought, and the allocation of funds for each stock before entering the market. When to reposition, when to reduce positions, when to clear positions, and when to cut losses, etc. All of these should be thought through and detailed rules should be formulated before buying. Then, invest according to this plan in an orderly manner.
Finally, buy the stocks you want to buy within one day or two or three days according to the plan. Then, maintain stillness for a period of time, and only start taking action when market fluctuations trigger your investment plan.Absolutely, one must not invest haphazardly like Old Hu, buying wherever they see and think of. Such unplanned investments can easily lead to a loss of control over the overall investment, greatly affecting the investment mindset, and ultimately resulting in investment losses.
Of course, there are commendable aspects to Old Hu's investment:
1. Entering the market during a downturn
This is a good move. Most people prefer to enter the market during a bull market, but Old Hu is able to enter when the market is not doing well, which shows that Old Hu has a certain amount of courage and insight.
2. Diversified investment
Old Hu mentioned in the article, "Seven stocks cover different industries." This is extremely correct. In essence, this is a stock portfolio, which can effectively diversify risks. It shows that Old Hu has a certain awareness of risk control.
It is very important to formulate a detailed investment plan before buying. It is like the design drawings drawn before building a big bridge, which is related to the long-term investment layout in the future.
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