Why do retail investors lose? Is it chasing the rise and killing the fall, greed and fear? Or information asymmetry and bad luck? These are indeed part of the reasons why retail investors lose. However, this is not the root cause. These just make retail investors lose faster. The

Why do retail investors lose?

Is it chasing the rise and killing the fall, greed and fear?

Or information asymmetry and bad luck?

These are indeed part of the reasons why retail investors lose. However, this is not the root cause. These just make retail investors lose faster.

The fundamental reason why retail investors will lose is because they are retail investors and have small funds..

Let's play a game first: two people toss a coin and bet on heads and tails, 100 at a time. The game is absolutely fair and impartial. The only condition is that the winning party cannot call stop until it loses money and admits defeat. One person's principal is 100W, and the other person's principal is only 100 yuan. Who do you think will win in the end, or is the chance of winning 50/50?

The outcome is obvious, the person with only 100 yuan in capital will definitely lose.

coin game is still an absolutely fair game with the same winning rate. In the stock market, what is even more cruel is that you are still playing an "unfair" game. Your information acquisition channels are not as good as those of the main players, and your understanding of the industry/company is not as good as the main players. In addition, your capital is larger. It’s a drop in the bucket, what do you think you have a chance of winning?

How to win?

knows where the problems are and where the disadvantages are, and can overcome them one by one.

Problem 1. Small amount of funds;

This is the biggest disadvantage of retail investors, and it is also the only disadvantage that cannot be avoided by any means. Therefore, we can only diversify our investments and reduce risks.

Corresponding strategy: diversify your investment. It is not advisable to hold a full position or a heavy position in a certain investment variety.

Question 2: Want to win even after winning;

The weakness of human nature is fully reflected in this market. In the bull market, the Shanghai Composite Index reached 4,000 points, dreaming of breaking through 5,000 points, reaching 5,000 points, and dreaming that it would inevitably break through 6,000 points.

Corresponding strategy: Develop a strategy, take profit and sell in batches in the bull market, strictly implement it, do not be greedy, and do not be led by desire.

Question 3: Sell at a loss;

As long as there are no problems with the company's fundamentals, there is still a chance if you don't sell. If you sell at a loss, you will immediately declare surrender.

A-share has always been bullish and bearish. A cliff-like collapse will first make those who added leverage liquidate their positions directly. Then within three to five years, a group of retail investors will be forced out of the market. Within five years, they will finally die. A group of people who are desperate for money to get out.

If you commit an evil act (stock market crash), you can still be forgiven; if you commit an evil act on your own (increasing leverage to blow up your position), you will not be able to survive.

corresponding strategy: invest spare money, do not use leverage, and outlast the main force.