Recently, some stock market friends have been quite anxious, asking me, "Will the stock market rise in the future?"
This reminds me of the A-share market in 2008. The stock market in 2008 was like a storm, with the market falling from 6,000 points to more than 2,200 points. My unit leader, who usually looked down on me, had no choice but to put aside his pride and urgently called me: "Lao Meng, what should we do? The stock market has fallen to this point. Some people say it will break through 1,000 points! I am heavily invested now, should I cut my losses and get out first? If it falls to 1,000 points, my loss will be too great. If I run away now, the loss will be less. The bearish news is different from before!"
I laughed: "Who told you it would fall to 1,000 points? There is no God in the stock market, don't listen to those so-called 'world-class institutions' talking nonsense. Think calmly, what is the probability of the stock market falling another 1,200 points to 1,000 points in the future? What is the probability of the stock market rising 1,200 points from 2,200 points to 3,400 points?
Based on the current situation of the stock market, I think the probability of falling to 1,000 points is less than 10%, but the probability of rising to 3,400 points in the future will reach more than 60%! The probability ratio is 1:6, the probability of being at a low point here is far greater than the probability of falling in the middle, what are you afraid of? Even if you are very unlucky, and the market really falls to 1,000 points, it will still rise to more than 3,000 points in the future, right? The possibility of 1,000 points becoming the top of the Chinese stock market for several years is too small. On the contrary, the possibility of rising to more than 3,000 points in the future is more than 90%.
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Your money is all your own, not misappropriated. At most, wait a few more months or years, what are you worried about? If you sell now, and try to make a small profit from the extremely small possibility of 1,000 points in the future, you may end up selling at the bottom area. Once the market rises sharply in the future, can you ensure that you have time and courage to buy back? I think it's better for you to look at the overall situation, calculate the big direction, and stay stable and unmoved is the best policy." The leader nodded repeatedly.
Soon after, the market fell to around 1,700 points at its lowest, and the next year the market rose to more than 3,400 points, and seven years later the market rose to more than 5,100 points. Whether the leader cut his losses at that time, I don't know. Anyway, I have a clear conscience.
The stock market situation is different every year, but human nature never changes. The overall trend of the world economy continues to improve in the midst of fluctuations! The A-share market is now at a time when many stock market friends are anxious. In my view, there is no need to worry and worry at all.
Now is the bottom, and the future A-share market will definitely rise to 3,500 points or even 4,000, 5,000 points. What we should worry about most now is not the market, but the fundamentals of the listed companies we hold. If we hold an excellent company, even if we are trapped by 50% now, it is very likely that the stock price will reach a new high in the future, and we will not only be able to break even but also make a profit of 50% or even more than 5 times in the future!
What is the most terrible thing now? It is that the company behind the stock we hold is too bad. The most feared is that their performance has been sluggish, falling the most when the market falls, rebounding the weakest when the market rebounds, and falling even when the bull market comes in the future, and finally falling to delisting. Then our money is really gone!So, the most important thing to do at present is to examine the fundamentals of the stocks we hold in our hands. Is it really a good company? What are its future prospects? In the past two years, the bear market has come, and the market has fallen continuously, and many people have panicked. What is the last straw for investors? I thought about this question very thoroughly when I was middle-aged.
Excellent listed companies are the last guarantee for investors to do stocks. Be a good person, choose a good company, and get a good reward. If we can buy stocks of a good company at a low price or buy stocks of a company that has been paying high dividends for many years, it would be even more perfect. If we are stuck in the stocks of a good company, as long as we hold on for a long time and replenish our positions from time to time, our hope of breaking even and making money in the next few years is very great. If we buy the stocks of a bad company, the longer we hold it, the greater our risk.
The problem is that most investors don't know whether the stocks they hold are of a good company or not. This is the most worrying thing! Therefore, for ordinary investors, it is best to invest in index funds. Index funds are a collection of excellent companies, no matter how bearish the market is, the probability of the index reaching a new high in the future is infinitely close to 100%! Especially for those industries with bright prospects or comprehensive index funds.
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