Investing in stocks is a process of developing effective and flexible operational strategies and tactics after fully understanding yourself and the market. In the investment process, how to reduce blindness and maximize profits?
First, investors need to determine the right investment environment for themselves. In terms of the general environment, the stock market can be divided into bull markets, bear markets and shock markets. A bull market provides the basis for most investors to make profits and is the most ideal environment for investors to make money. In a bull market, investors can make a lot of money if they follow the trend and hold on to their stocks. However, not all investors are comfortable with bull markets and some are only comfortable with profit-making in a shock or bear market. Therefore, investors need to be clear about the kind of market environment they are suited to operate in, and the only way to take the first step towards success is to find the right investment environment for themselves.
Secondly, investors need to determine the appropriate investment analysis method for them. There are many methods of stock investment analysis, some investors are good at technical analysis, some are good at fundamental analysis, and some are good at combining fundamentals and technicals for analysis. In general, investors need to master a set of analysis methods that suit them. For example, if an investor is good at using fundamental analysis to select stocks, he or she needs to understand the operation of individual stocks, their financial situation, the size of their share capital, the background of their shareholders, their industry status and many other aspects, especially the financial reports and board reports of listed companies may imply information related to the future development of the company and require investors to read them carefully. If investors like to use technical analysis to select stocks, they need to learn one or more technical analysis methods, master their essence and apply them in place.
Thirdly, investors need to identify investment varieties and investment strategies that suit them.
There are many varieties of investments in the stock market, but they can be broadly divided into two types, namely aggressive and prudent. Investors can find the right variety of operation for themselves according to their own personalities. At the same time develop a corresponding investment strategy, that is to say, for a stock whether you intend to do short term, medium term or long term. For aggressive stock varieties, investors generally focus on short term or swing operations, while for solid stock varieties, they are more suitable for medium and long term. In the actual investment process, some investors tend to have a misalignment of investment varieties and investment strategies. For example, buy is an aggressive stock, should have been a short term operating strategy to operate, but because the stock price is very good temporary change the original intention of the investment, into the medium-term hold, the results of the stock price in the short term after a rapid rise in the sharp fall, so that the profits have been in hand for nothing or even loss. For example, the investor bought a fundamentally good and sound stock, the corresponding investment strategy needs to be based on the medium and long term, but in the buy after the loneliness or can not withstand the shock, to short term ideas thrown away, the results in the sale of the stock price rose. Therefore, investors should also develop an investment strategy to match the investment variety after determining it to avoid losses due to the misalignment of the two.
Finally, investors should do a good job of managing their mindset.
"Speculation is speculation mindset". Investors have a well-trained, good and calm mindset is essential for investment. The stock market is like a battlefield, and victory or defeat is a common occurrence for soldiers. In the investment process, it is almost impossible for an investor to achieve a 100% success rate. Many investors often feel remorse, regret or even self-loathing after a failed operation, and a poor mindset will in turn affect the outcome of the next operation, causing a vicious cycle. For mature investors, each failure and lesson should be faced openly and rationally to recognise mistakes and correct them so that they can continue to gain valuable experience for their investment career. Likewise, for success, it is also possible to "Not be happy with things" And maintain a normal and calm state of mind. Only with a good mindset can you ensure that the operational discipline you have set out in advance is implemented smoothly.