What I consider the safest and easiest principle for making money through stocks.
Ultimately, there is no single answer to investing.
It depends on individual temperament.
And everyone's judgment is different.
As for those who claim there is a formula because everyone's interests—including institutions—are intertwined,
or those who claim exactly when the market will rise or fall, I believe they fall into the category of scammers from the start.
Therefore, what I consider to be the easiest skill is:
1.
Do not make the period of being completely out of the market excessively long.
(You can exit completely, but if you stay out entirely, you might miss out on the period of peak returns.)
2.
Strictly define the principle for your cash holding ratio.
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For beginners, I recommend a 50/50 split between investments and cash.
A 20–30% cash ratio is standard for general investors.
And the moment you think, "This is my big move," keep it at 20–30%.
You must have a specific criterion for the point where you commit 50% of your cash.
3.
The most important thing.
Your criteria for buying and selling must be clear.
Even people trading futures likely have clear criteria.
Even for pension fund investors who rebalance,
unless they are blindly doing dollar-cost averaging into just one type of S&P or Nasdaq 100 fund,
there will inevitably be a ratio,
and there must be a standard for buying and selling.
If these criteria fluctuate inconsistently,
that is exactly where the standard for losing money is created.
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Conclusion.
1.
Strictly adhere to your cash holding ratio.
2.
If you make a big move, establish a clear rule to reset your cash holding ratio and
strictly follow it.
3.
Since the market never goes exactly as predicted based on experience,
if there is an unexpected crash or surge,
having the courage to cut losses or take profits at an appropriate level and exit is also a matter of courage.
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I don't know if there are people who make money by going "all-in,"
but I never prefer going all-in,
and I don't personally believe that going all-in inherently leads to higher returns.
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