How to offset the "fear" in investment through strategy?
Sometimes we do not make money in the stock market because we are afraid, that is, "fear". Let's talk about how to offset various "fear" in investment through strategies?
Individual investors have "three fears"
Looking back on the ups and downs of the securities market in the past two decades, it is difficult for individual investors who have always been actively involved in it to get rid of the shadow of "three fears", no matter how rich their experience and how painful their lessons are. The so-called "three fears", the first fear of "detention.". The money of individual investors is not "external property", so almost everyone is afraid of losing money in business; second, they are afraid of "stepping down". Since the idea of "other people make their own profits, even if they lose money" has become popular, there have been a number of advocates of "no advance or retreat" in the air army; third, they are afraid of "not winning the index". People who have neither lost money nor lost ground seem to have no regrets, but they are also afraid that their stocks and funds will not win the index.
In fact, there are no more than three market trends: unilateral bull market, unilateral bear market and upward (downward) market volatility. The so-called "three fears" refers to the different psychological states of investors in the face of these market performance. The most important is to disturb the thinking, sell low and absorb high; the light is to affect the mood and lose the mentality.
Strategy is needed to prevent "three fears"
To avoid these "three fears" in the investment process, we need to pay attention to some investment strategies. Although the appropriate investment strategy can not make investors invincible, at least they can know it well and win well.
In my opinion, investment strategy can be viewed from three perspectives. The first is "market selection", that is, to determine the allocation proportion of assets in different markets; the second is "selection method", which is to choose the investment mode in a single market, usually between active investment and passive investment; the third is "timing", which means choosing the time for investment, including batch investment or one-time investment.
Looking at these three angles, as far as the domestic securities market is concerned, the "right method" is undoubtedly the most crucial. One is that the domestic real economy, as the pillar of the securities market, is still in the stage of emerging and transition, which also creates the characteristics of short economic cycle and rapid industrial transformation. Therefore, it is particularly necessary for investors to adjust their investment modes and switch their investment targets to adapt to market changes. Secondly, in the domestic securities market, it is difficult for listed companies or market participants as the main body of the market to compare with overseas mature markets, which objectively leads to the current situation of fast switching of short-term hot spots and weak long-term investment effect. This requires investors to abandon some effective investment strategies such as "long-term index investment" in overseas markets to adapt to the "Chinese characteristics" of the domestic market.
"Active investment" wins
So how to choose the investment mode in the market with different cycle? What kind of investment strategy should be adopted in the stage of economic recovery?
For investors, the investment methods are mainly divided into active investment and passive investment. The former is that investors construct their own investment portfolio and win over the index by choosing stock portfolio. This kind of investment strategy is more effective in unilateral down market and volatile market, in which the relative return space of individual stock is larger than that of index. Investors can often achieve the purpose of "resisting falling" and "outperforming the index" by choosing the right industry; on the contrary, passive investment is to track the index and keep pace with the market by purchasing index products. This kind of investment strategy is often used to fight against the enemy of "unable to win the index" in unilateral bull market, so as to ensure the average return of the market.
Therefore, in order to determine whether the future economic recovery stage is active victory or passive stability, the key is to judge which of the index and high-quality stock portfolio has greater relative return space.
First of all, from the perspective of the real economy, active investment in the future is easier to win. The stage of economic recovery is different from that of economic prosperity, so it is difficult to produce the situation of whole industry development. Due to the influence of liquidity, policy orientation, resource allocation and other factors, there is a recovery sequence in various industries. At the same time, in the post economic crisis era, economic recovery is bound to be accompanied by industrial restructuring. The investment value of backward industries and enterprises with excess capacity will be greatly reduced. Therefore, the market income will come from the theme industries and high-quality enterprises. The market as a whole tends to present structural investment opportunities. At this time, a good grasp of the asset allocation strategy and industry rotation strategy will become the key to win the investment.
Secondly, from the perspective of market mentality, the income space of the index is relatively within a certain range. From the historical experience, market participants often use the historical comparison of index and economy as the main basis to measure the investment value. For example, when the Shanghai composite index reaches 4000 points, if the profitability of enterprises has not reached the level of 4000 points in 2007, investors will think that the market is overvalued and liquidity will withdraw. On the contrary, if the index goes up slowly with the economic recovery and individual stocks are fully active with the theme investment, it will not lose liquidity but also meet the market investment willingness. Therefore, in the context of the current economic recovery, the Shanghai composite index is at 3000 points after experiencing rapid rise. From the perspective of market participants' willingness and investment behavior, the index tends to show a wide range of fluctuations, while excellent growth stocks still have room for rise, so the strategy of selecting individual stocks will obtain relative index Count better returns.
Of course, even if the era of active investment is coming, it does not mean that everyone is suitable for active investment. As individual investors, if they are lack of confidence, time and experience, choosing long-term passive index investment is still a suitable investment strategy in the era of active investment. After all, "keeping pace with the index" may create a detached investment mentality.
If they choose to invest actively, then as individual investors, they can pay more attention to the industry rotation opportunities brought about by policies and economic recovery. At the same time, they can also build a portfolio of theme investments with the help of professional investment management institutions such as funds, securities companies, and trusts, so as to obtain excess returns relative to the index. Although we may not be able to overcome the "three fears", we have the opportunity to win in the market by strategy.