A fan friend asked: "Teacher, hello! I have a question for you! What kind of stocks should we pay attention to when the stock market is sluggish? What industry's stocks should we buy? Thank you!"
Here is my answer:
It depends on whether you want to do long-term or short-term trading. If you want to do short-term trading, then regardless of whether the stock market is sluggish or not, whether it is a bull market or a bear market, you should chase the hot market concepts. However, the risk of capturing hot spots in a bear market is relatively high because the hot spots change too quickly in a bear market, so the success rate of chasing hot spots in a bear market is relatively low.
Although the success rate of chasing hot stocks in a bull market is relatively high, if you fail to escape in time at the end of the bull market, the final loss will be fatal. It may take five or ten years to recover the principal. The difficulty of escaping the top of the bull market is very large for short-term traders, because before each market crash, there are many hot spots, all of which are opportunities worth participating in short-term. Like the collapse in 2015, the opening was a one-word limit down, and short-term traders almost had no chance to retreat completely.
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The most deadly thing is that short-term speculation seems to make a lot of money. If you extend the time to more than ten years, you will find that the money made by short-term speculation is far behind the long-term value investment. Most people who do short-term speculation are still losing money after ten years, and even suffer heavy losses. People who can still make money after ten or twenty years of short-term trading are definitely one in a thousand or even one in ten thousand.
If you are doing long-term value investment, then regardless of whether the stock market is sluggish or not, whether it is a bull market or a bear market, you should pay attention to the fundamentals of the listed companies or the prospects of the industry. Stocks with excellent company fundamentals or good industry prospects are generally more expensive during a bull market, and their stock prices will generally fall sharply during a sluggish market or a bear market. This is the best opportunity to buy these stocks with good fundamentals and make a lot of money from long-term investment. The current A-shares have such opportunities.
There are many industries with bright prospects for the future of A-shares, such as consumer goods, pharmaceuticals, new materials, media, new energy, robots, and so on. When the stock market is sluggish, it gives investors in the market the opportunity to buy them at a low price. If you can diversify investments appropriately now and firmly buy in the long term, you will inevitably receive a rich return in the future. The return on long-term investment is much higher than short-term trading, and the investment income may be several times or even dozens of times higher, and the risk is also much smaller.
However, the difficulty of long-term investment lies in its counter-intuitive nature, dullness, and the need to endure countless roller coaster market conditions, and there may be a risk of being trapped by about 50%, and it may also require holding shares for several years or even decades. Ordinary people find it hard to bear such torment. They are very likely to think that doing so is foolish. When I was young, I couldn't bear such suffering, and it was only after middle age that I had the determination to hold on for a long time.
Now, fans often ask me why I keep riding the roller coaster and why I don't do high selling and low buying. My experience of more than twenty years is that high selling and low buying will eventually miss the main rising market. In essence, it is to pick up sesame (the difference between high selling and low buying) and lose watermelon (the main rising market).Taking the world-renowned investment master Warren Buffett as an example, he held BYD stock for 13 years, experiencing many roller coaster-like market trends, and ultimately earned more than 30 times his investment. One might ask: Can we make an investment return of more than 30 times by selling high and buying low over 13 years?
Some people believe they possess the ability to trade differences by selling high and buying low. Such individuals can try to do their own wave or short-term combat to see if they can earn more than 30 times in 13 years. Many things in the world that seem easy to us will reveal their true difficulty after we actually start doing them for ten years. In the stock market, we may earn three times in a year, but after three years, it is difficult to earn even once. After ten years, whether we can survive in the stock market is even a question. This is the meaning of "earning three times in a year is easy, but earning once in three years is difficult."
Without long-term investment practice, there is no right to speak. The words in my daily articles are all the summary of my 27 years of investment combat experience, not a word is heard from "experts say" or "books say", everything I say is my own investment insights over the years.
My current investment strategy is to focus on the consumer sector, including livestock, white liquor, home appliances and other such sub-sectors. A small amount is allocated to the technology sector, including new energy, robots, VR, etc. Then lie down and firmly hold on, regardless of how the market hotspots change, I will not be moved. Patiently wait for the performance recovery of the consumer industry, and firmly wait for the arrival of the consumer sector's market. I have been prepared to wait for several years or even decades since the day I bought it.
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