Why do many people do not buy more when the bottom pulls up, but dare to buy after a small drop?
The subject of the question asks: Why do many people do not buy more when the bottom pulls up, but dare to buy after a small drop? Pay attention to the core key words: after a lot of rise, a small drop first rises a lot, and then buy again. . In fact, it is essentially chasing the rise. The psychology of many retail fund investors is like this. When the fund is at the bottom, they have not dared to buy. The market suddenly rises, and the bottom starts to rise. They hesitate to start, and want to wait for another drop. Unexpectedly, the follow-up funds soared all the way, and retail investors who missed the opportunity to enter the market rushed to beat their thighs. After hesitating for a long time, I happened to encounter a small drop, thinking that I could not miss the last opportunity to make money, so I rushed to buy.
Looking at a set of data first, the length of the blue tree diagram in the figure above represents the purchase volume of the fund. You can clearly see that everyone is buying frantically in the bull market, and almost no one is interested in funds during the bear market. The consequences of this kind of chasing ups and downs are very terrible. When funds have been making money, most of them are in the late stage of the bull market. At this time, chasing the rise and the fall can only step on the high point. Buying is more expensive than most of the time, so the final outcome can only be a loss.
Fund purchase rates are mostly low, as long as 0.15% or 0.1%. After all, no one sets a threshold for spending money. However, buying funds is for long-term investment. To prevent short-term speculation, officials directly impose restrictions on the rate. The shorter the holding time, the higher the selling threshold, which implies that our investment funds must be held firmly and guarded against arrogance and rashness. It is a pity that many people are making short-term investments while complaining about the high rates and costs, and they cannot understand the good intentions behind the supervision…
Hold less than 7 days, the rate is 1.5%. This is the punitive rate specified in the text. Hold for more than 7 days, the rate is reduced to 0.5%. The longer you hold, the lower the rate. Let’s calculate an account for everyone, assuming the cost is 10,000 yuan. Fast in and out within 7 days, the rate is 0.1%+1.5%, the cost is calculated alone, and 160 yuan will be given to the fund company for one operation. Repeated for a month, the cost is 640 yuan, and the gas money for the two SUVs is gone. Be a little more patient, hold for more than 7 days and sell at a rate of 0.1%+0.5%. The cost is calculated alone and 60 yuan will be given to the fund company for one operation. Repeat for one month, the cost is 180 yuan, and half of the cigarette money is gone. Repeated for one year, the loss of principal exceeded 20%… How many retail investors can guarantee that their annualization can exceed 20%? The most fatal thing is that the annualized 20% only covers the cost of the loss, and if you want to make money, you have to annualize more than 30%. Buffett could not achieve this goal!