Are you a retail investor? Is the market often targeting you? Come check the [Retail Investor Self-Assessment Manual], do you have these characteristics of a retail investor, and how to avoid becoming one.
One, what is a retail investor?
#Retail Investors usually refer to those easily harvested individual investors. They often see the market as a zero-sum game, believing their losses are others' profits, thus falling into the trap of frequent trading.
In fact, the market is more of a growth place influenced by economic cycles, rather than a simple win-lose scenario.
Two, what are the characteristics of retail investors?
①Severely lacking basic reading skills and learning awareness, such as never reading instructions when buying things and always relying on others for explanations.
②Blindly buying as soon as entering the market, not observing market cycles, and directly following trends in investment. Hearing about someone else's profits leads to reckless and thoughtless bets.
③Viewing trading as a zero-sum game, pursuing profits by harvesting others which leads to frequent trading and erroneous decisions.
④Lacking independent thinking, easily influenced by insider information or emotions, and trading too frequently.
⑤Weak ability to make money outside the market, often borrowing money or investing non-disposable funds, leading to a broken capital chain.
Do these characteristics sound familiar?
Three, how to avoid becoming a retail investor.
The key to avoiding becoming a retail investor lies in changing mindset, enhancing cognition, and developing rational trading habits. Here are the main methods:
●Recognize that the trading market is not a zero-sum game but a growth market influenced by economic cycles. There are no assets that only rise without falling, but if you extend the timeline, there are assets that can be considered to only rise over the long term.
●Reduce trading frequency, minimize operations, and focus attention on making money outside the market and personal growth. Frequent operations can lead to a decrease in winning rates, a collapse in mindset, and also incur high transaction fees, creating a vicious cycle.
●Observe the market for at least a year before entering; do not rush to buy. Start investing in a bear market.
●Only invest disposable funds, and always keep a certain proportion of cash as backup to avoid borrowing money or going all in.
●First choose the most traded assets to start with, cultivate independent judgment, and do not trust any insider information or others' suggestions. Tencent, Apple, $BTC, gold, these are all top choices in their respective categories, results filtered by smart individuals in the market; you just need to follow and buy, it's not difficult.
●Enhance reading and learning, exercise intelligence, learn to look beyond appearances to study substance, control emotions, and take responsibility for one's actions. It is strongly recommended to read more of Li Xiaolai's books (Self-cultivation of Retail Investors), aligning one's heart and mind.
