Life is like a gamble; the saying that not gambling is losing spreads like a virus in the investment community, igniting passion in countless people. It cleverly confuses the spirit of striving in life with gambling-style all-or-nothing bets, creating an illusion that not going all in is cowardice.
But the truth is: this statement itself is the biggest scam set up by the dealers.
I have personally experienced the entire process of this scam. With a principal of 300,000, I went all in on a cryptocurrency called STARL, and my account once soared to 10 million.
That feeling is like standing on top of the world, thinking I have mastered the secret to wealth. So I crazily invested all 10 million into Dogecoin and the NFT market, resulting not only in profits going to zero but also incurring heavy debts.
A friend of mine experienced the same thing, turning a principal of 100,000 into 3 million through contract leverage, ultimately unable to escape the fate of liquidation. Our story is not an exception; it is a tragedy that repeats itself every day in this market.
The essence of financial markets is not a casino but a complex ecosystem. True investment masters never advocate for an all-in philosophy. Buffett often says: The first rule is to never lose money, and the second rule is to always remember the first rule. This stands in stark contrast to the idea that not gambling is losing.
Data shows that over 90% of contract traders ultimately incur losses, while those who adopt diversified investments and strict risk management strategies can achieve stable returns in the long run.
Losses are more terrifying than missed opportunities; this is a lesson learned with real money. Miss an opportunity, and the market will give you countless chances.
But a significant loss may take years to recover from, or you may never bounce back.
The psychological theory of loss aversion tells us that the pain of loss far exceeds the pleasure of equivalent gains. This is also why those who have once become rich and then returned to zero often fall into a deeper despair than those who have never been wealthy.
True investment wisdom lies in knowing that you can win without going all in. Use a barbell strategy to allocate most of your funds to low-risk assets, with a small portion for high-risk, high-reward investments.
Stick to position management, setting a strict stop-loss discipline where a single investment does not exceed 5% of total capital. These seemingly conservative practices are precisely the key to long-term survival in the market.
In this era filled with myths of sudden wealth, we need to soberly recognize: those who advocate that not gambling is losing are either lucky individuals who have not yet experienced a complete market cycle or dealers intent on harvesting you.
Investing is not a black-and-white gamble; it is an art of risk management.
Remember! The market will always reward those who know how to protect their principal and punish adventurers who treat investing as gambling.