Clearly, long-term investing is easier for making money, so why do retail investors prefer short-term trading? Here are my personal views.
Retail investors are obsessed with short-term trading, which essentially stems from human weaknesses and the double trap of market pitfalls.
1. The fantasy of quick riches; the excitement of short-term price fluctuations feels like 'gambling', always hoping that buying today will lead to limit-up tomorrow, while long-term investments take months to show results? It's too torturous!
2. The urge to control; believing that long-term investing relies on luck (for example, holding Maotai for 10 years requires patience), while frequent short-term trading seems to provide control over the situation, when in reality, they are being used as fodder by major players.
3. Information asymmetry misleads; the overwhelming number of 'catching limit-up' secrets and brainwashing from trading groups misleads people into thinking there are shortcuts in short-term trading, while concealing the fact that 90% of retail investors lose money in high-frequency trading.
4. Anxiety over insufficient capital; with a capital of 10,000, doubling it only earns 10,000, which is why some gamble on short-term trades, unaware that the smaller the capital, the more one should focus on compounding (long-term returns) rather than relying on luck.
The truth: Short-term trading is a battlefield where experts cut each other down, and retail investors provide ample fuel, simply because they overestimate earning 10% in one day while underestimating the potential of tenfold growth over ten years.
