The core content of stock trading is to obtain profits through the price difference between buying and selling in the securities market. The rise and fall of stock prices vary according to market fluctuations. The reason why stock price fluctuations often exhibit differentiated characteristics is due to the attention of funds, and their relationship is like the relationship between water and ships. When the water overflows, the ship rises. There are generally four types of investment methods for stocks:
1. Short term trading. For example, T+0, the hype of the day or the hype of a few minutes. The main force is mostly speculative capital, mostly based on the time-division candlestick.
2. Short term. Mostly based on the daily candlestick, varying from the next day or several days. Most of them are also dominated by speculative capital.
3. Medium to long term. Mostly based on weekly or monthly candlesticks, with strong trading strength, operating within a six-month or one-year cycle.
4. Long term. Mainly based on monthly or annual candlestick charts, the main force in the market has abundant funds, mostly consisting of funds or super large investors.
Choosing stocks for long-term investment requires the following judgments:
1. The enterprise market is relatively large and not easily influenced by large funds, which can cause significant fluctuations during the day.
2. The company has a good future development and a large profit potential.
3. The current performance of corporate stocks is average, with relatively low prices.
In the process of stock investment, many investors adopt long-term holding strategies and reap great rewards, but there are also some investors who still suffer losses even after adopting this strategy, and these losses are not only money, but also time and energy. Why is this? The teacher found through investigation that investors who experience losses have the following misconceptions
1、 Stock selection misconceptions
Investors make medium - to long-term investments in stocks or short-term popular varieties with good gains, but in the actual operation process, there are still many investors who adopt short-term stock selection thinking. Once these stocks make short-term profits, they will be unwilling to take profits due to the medium - to long-term reasons, and ultimately end up with a "bamboo basket drawing water and losing" situation.
When choosing mid to long term stocks, investors should be good at identifying undervalued stocks and sectors in the market. After finding suitable targets, as long as the target stocks are still in the incubation period, investors can boldly buy on dips;
2、 Time selection misconceptions
Most investors prefer to invest in the medium to long term during the period of skyrocketing stock prices. In fact, when it comes to timing their holdings, investors should be better at considering them when the market is sluggish. When the market is sluggish, investors can consider medium-term operations because choosing the right opportunity means a higher probability of success; On the contrary, when the market is booming, investors should remember to blindly build positions for medium and long-term investments.
3、 Misconception of Holding Time
Some investors choose a medium to long term stock and soon after, the stock rises sharply. However, investors stick to the medium to long term strategy and end up in a correction period after the main uptrend. At this time, investors still hold onto the stock and are happy with the outcome. In fact, holding stocks for the medium to long term does not necessarily require holding them for a long time. Investors need to analyze the specific situation of the stocks themselves and adopt corresponding holding strategies in order to truly achieve long-term profitability;
The above content is the three major misconceptions about the failure of medium and long-term investment shared with investors. We hope it can be helpful for investors to understand the methods of medium and long-term investment.
