Investors, especially retail investors, will fall into various misunderstandings during the stock trading process, leading to losses. So, what misunderstandings should be avoided in retail investment

? Financial Manager will share the answers with you.

Some of the misunderstandings in stock investment are cognitive and some are operational, because these misunderstandings can easily lead to investment failure, so naturally they should be avoided if possible. So what misunderstandings can be avoided? Let’s take a look at the following: (1) Misunderstanding 1: Buy stocks immediately after hearing that earnings growth is promising

“Buying stocks depends on fundamentals.” More investors are no longer satisfied with listening to news and buying stocks. , buy stocks based on technical lines, but hope to invest more rationally. Understanding the fundamentals of stocks is one of the important things when picking stocks. However, for non-professional individual investors, understanding the fundamentals is not as simple as imagined.

First of all, it is difficult for individual investors to spend a lot of time and energy on field research like institutional or professional investors. To a large extent, they have to rely on information from newspapers, magazines, and the Internet. After information has been transmitted through multiple hands, the authenticity of the information will inevitably be affected. Especially with the rise of online information, a large amount of stock information is mixed. In some website stock bars, there are even professional "trustees" spreading false information. It is difficult for individual investors to distinguish the authenticity.

Secondly, due to limitations of professional capabilities, some investors cannot rely on themselves to effectively analyze the true connotation of the information even if it comes from the formal channels of listed companies. Sometimes, it looks like good bullish information, but it is difficult to grasp its essence. The final result is improper stock selection. It is not until you are trapped that you shout "So that's it!" (2) Misunderstanding 2: You will definitely make money if you hold on to it in the long term< /p>

The short-term is silver, the long-term is gold. In stock market transactions, the winning potential of long-term investment is often greater than that of short-term speculation. That is to say, choosing the right stock holding strategy is often more profitable than frequent entry and exit. .

However, there are also investors like this around us. Their understanding is that although the stock price falls in the short term, it will definitely rise again. As long as you hold on to it for the long term, there will always be a day when you make money. Some people even say: As long as you don't sell, you won't lose money, and you will definitely make money in the long run! (3) Misunderstanding 3: Eager to rebound after the stock market plummets

After the stock market experiences sharp declines, the stock market tends to rise and fall sharply. A strong rally followed. Therefore, when the stock market falls, some people often do not analyze the reasons for the sharp changes in the market, but rush into the market to rush for a rebound. They will also say: hurry up to enter the market to take advantage of the situation. After the sharp decline, there will be a reversal. Make a fortune in just two days.

In some cases, a sharp decline in the market does provide the potential for a rapid rebound, which is often referred to as a "boom and bust." However, for investors, it is a very dangerous investment behavior to enter the market to rush for a rebound regardless of the situation. When there is a systemic risk in the market, the plunge is likely to be just the first step in a downward trend. At this time, blindly entering the market with the mentality of rushing for a rebound will not only make it difficult to make a profit, but will easily lead to oneself falling into an abyss. (4) Misunderstanding 4: Would rather have a small drop than take a long position

This mistake seems to be completely opposite to investors who hold the idea of ????"definitely making money in the long term", going from one extreme to the other. The specific performance is to keep an eye on the rise and fall of the stock market every day. If the stock price drops slightly, sell the stock immediately. Although this approach seems to be able to avoid the risk of being deeply trapped, it is difficult for investors to obtain profits if they use this operation method. Profit opportunities are constantly cut and sold, which increases investment costs. You may also continue to miss out on high-quality stocks and miss investment opportunities. (5) Misunderstanding 5: Heavy positions in strong stocks

Strong stocks are like stars in the market. Their every move firmly attracts the attention of investors and is related to the ups and downs of the market. Strong stocks tend to move strongly, often rising for several months in a row. Those who catch it are excited, and those who miss it are annoyed.

When a certain industry or type of stocks rises sharply, and when our eyes and ears are flooded with information about strong stocks, many people find it difficult to resist the temptation. In order to make more money, some people even bet all their funds on strong stocks. However, strong stocks can fall just as fast as they rise. If you fail to get out in time, the losses will be staggering. (6) Misunderstanding 6: Fear of buying high-priced stocks

Many investors are afraid of buying high-priced stocks. I feel that stocks are always priced at 30, 50 yuan or even higher, so I don’t dare to “touch” them.

Firstly, I feel that my capital is small, the stock price is high, the quantity I can buy is too small, and the chance of making money is small; secondly, I feel that the high-priced stocks "have already risen so much", and if they fall, , then it will cost a few yuan or even ten yuan to go down, and the risk is much greater than that of low-priced stocks. (7) Misunderstanding 7: Buying stocks by listening to stock reviews or gossip

Some retail investors, especially middle-aged and elderly investors, especially like to listen to various stock reviews and buy and sell stocks, and want to follow "experts" and "authorities". It’s not easy to make mistakes! There are also people who like to collect various gossips from various channels to decide whether to buy or sell stocks in their hands. (8) Misunderstanding 8: Frequent operations let go of big dark horses

Most retail investors are always happy to operate frequently in the short term, hoping to obtain price difference income. But in a bull market, it is easy to "ride a dark horse and fail to win in the end."

(9) Misunderstanding 9: Blindly investing in unfamiliar derivatives

With the development and opening of the stock derivatives market, in recent years, new products such as warrants and stock index futures have gradually entered the stage of personal investment. the scope of the person’s field of vision.

However, many people start investing blindly without clearly understanding the investment rules and investment attributes of new tools and new varieties, which ultimately leads to investment failure. (10) Misunderstanding 10: Buying more stocks can diversify risks

Some retail investors "resolutely implement" the concept of diversified investment. They have a small amount of funds but invest in a large number of stocks. As a result, Either due to poor care, or simply for the purpose of diversifying investments, the funds are dispersed into different stocks, but the risks are not dispersed, and the result is one word: loss. Moreover, many investors still don’t understand what diversified investment is in the true sense. They buy many stocks in the same industry, which does not play the role of diversified investment at all.