It's hard for you to make a fortune against the trend, and it's easy for you to go bankrupt against the mean regression

It's hard for you to make a fortune against the trend, and it's easy for you to go bankrupt against the mean regression

 In fact, many major asset risks are not so difficult to identify, and some are even obvious (such as the stock market in mid-2015). But the difficulty is that we still don't know when it will return. Even at the end of the bull market, its rise is the most violent, which is often enough to destroy the rationality of the vast majority of people. Many people earn more than you every day. Are you depressed?

So this problem needs to be solved from the perspective of strategy and human nature. From a strategic point of view, the bull market foam period is the period with the strongest increase, but it is also very risky. In fact, this part of the money is not easy to earn. The best period to make money is from the bottom of the bear market to the beginning of the bull market, which is what I call the "making big money" stage. This stage must not be missed. In fact, it is the most profitable and the least risky. After this period of "satiety", it is almost a bull market boiling period. At this stage, we should no longer take the yield as the first goal, but take the initiative to reduce expectations and reduce equity assets. However, it is not allowed to be short. You can gradually reduce the position to about 20% and optimize it into the optimal portfolio. After that, you can hold it until the bear market is confirmed (even if it is confirmed after a 50% decline, the total yield is only 10%).

This stage is quite artistic (when to start to reduce is divided into several steps, which are not mechanical. It really depends on the specific situation and personal sensitivity). There is also a lot of luck, but the overall strategy is clear. In fact, the stage of making big money does not depend on the foam period at all. The foam period is just icing on the cake.

In terms of human nature, we should have awe for the future, keep the memory of history, and keep a sufficient distance from the "irrational". We should have the courage to take short-term risks in areas with large opportunities. In high-risk areas, we should also be brave to give up immediate interests. The first "courage" determines whether you can make money, and the second "courage" determines whether you can keep the money you make.

These can not be solved at the technical level but are determined by one's character. The most difficult thing about investing is that you are ridiculed by the reality when you remain rational. At that time, everyone will have great pressure, and investment masters are no exception. It is just a difference in degree. However, as long as you are right (note that rationality does not necessarily bring you correct judgment, but rationality is only the correct premise and necessary condition), you will be a big winner after a complete cycle. All the difficulties and hardships you have experienced at this time will become the support of your more rational and tenacious future. Therefore, part of the investment knowledge can be acquired through learning, and part must be acquired through experience. Therefore, this industry is really "the older the more popular".

Finally, don't forget that "it's hard for you to make a fortune against the trend, and it's easy for you to go bankrupt against the mean regression" is an inseparable integration of attack and defense. It's not enough to just see the risks. After all, we don't make money by shorting. What's more important is the vision of discovering big opportunities. Moreover, when you can see a variety of opportunities, you will naturally not be completely entangled in one asset or opportunity.