There's a cruel truth in the world of investment — what determines your final gain is not how much technology you have, but what kind of mentality you have. An average man with a stable mind, with a long-term return rate, probably won a "good man" who operates with anxiety。
Each time the market falls, there will always be two categories of people in the circle of friends: one who is afraid to sell and swear to never touch stocks again; and the other who are cool and even shut down their software without looking at accounts. Looking back a few years later, the latter tends to make a lot of money, while the former exhausts the principal in a single "scrambling down" exercise。
This is not a matter of luck, but a gap in mentalities. Today, we speak with data to see how the mindset affects the return on investment and how ordinary people can refine their own investment mentality。
Data 1: the mind gap is the pay gap
Let's start with some amazing data. According to mpi, the average annualized rate of return for a-equity individual investors over the past decade has been much lower than the market index and institutional investors。
The average annualized earnings of individual family members should be negative. This is not because the diaspora does not understand technical analysis — quite the contrary, many of them are on the k-line, and mcds are like a few janes. The real killers are mentalities: they trade frequently, they chase up and down, they don't hold up。
Studies have shown that the rate of change of hands is usually three to five times that of an institution. Every decision to buy and sell is accompanied by emotional fluctuations, while emotionally driven transactions are on average lost. You think you're high-throwing, and you're usually high-throwing。
"the biggest enemy for investors is not the market, but himself."
— benjamin graham
Three core mentalities determine your level of investment
Patience: being friends of time
Einstein says that the world's eighth wonder is compounding. But the premise of compound interest is that you can hold it. To look at a figure, assuming a principal of $100,000 and an annualized rate of return of 8 per cent, changes in assets under different holding periods:
It is also 100,000 principals, 8 per cent annualized: it makes only 8,000 in one year, which is not obvious; it turns to 1006,000 in 30 years, a 10-fold increase. And if it is a single-interest calculation, there are only 340,000 in 30 years — the difference between compound and single-interest is as high as 660,000。
The problem is that the vast majority of the dispersed households cannot wait. A 10 per cent increase and a 5 per cent drop in a rush to cut the meat. Patience is not a natural character, but a discipline that can be trained。
Discipline: overcoming greed and fear
Markets are always swayed between optimism and pessimism, and the moods of investors rise. Here's a picture of the classic investor mood cycle:
Is that clear? High moods tend to be high in markets, and low moods tend to be low in markets. When everyone is excited to talk about stocks and even taxi drivers are offering shares, they tend to be at the top; when everyone says "no more stocks" and the market is out there, they come near the bottom。
The point of discipline is to establish a set of rules that are then mechanically enforced without emotional interference. For example, a 20% drop in a month and a 30% reduction in a profit: the simpler the rules, the more important is enforcement。
Humiliation: admit you don't know
The most dangerous word for investment is "this is different." whether it was 6124 in 2007 or 5178 in 2015, there was a strong belief at the top of each bubble that "this wheel of cattle is different." maintaining humility means recognizing that it cannot predict short-term trends, that it may be mistaken, and that markets are always smarter than individuals。
A modest investor would do three things: decentralizing to reduce a single risk, leaving enough cash to deal with extremes, and continuing to learn rather than be self-proclaimed。
Four daily habits of mentalization
These four habits seem simple, but less than 10 per cent persist. The threshold for investment was never intellectual, but rather enforcement。
The investment is a marathon without end。
There are many people running fast and few people running long。
The market rewards those who are patient, disciplined and humble -
Not because they're smarter
It's because they make less mistakes。
Mind, that's your best investment strategy。
Buffet says, "investment does not require very high iqs, it requires stable emotions and independent thinking. "this sentence deserves to be written by every investor。
The market always fluctuates, but your mind can hold. When you don't go up and down, when you can face up and down, you've won most people。
May you make your way to the investment, take your mind and walk steady。
