Sometimes I think that investment has been relatively smooth in recent years. Even if there are difficult market conditions, they will not last too long.

What does it mean to be difficult for too long?

For example, after the bubble burst in Japan in 1990, the index fell for more than 20 years before reaching the bottom, and it was not until 2024 that the index returned to its historical high.

After the bubble at the high point in 2000, the Nasdaq index bottomed out again in 2009, and it was not until 2015 that it returned to the high point in 2000, and then entered a unilateral rising cycle. The decline in 2020 is nothing now. 2022 is a relatively large correction, and 2023 and 2024 will continue to rise unilaterally.

After gold peaked in 2011, it bottomed out almost 4 years later, and the price was nearly halved. It was not until 2020 that the price broke through the historical high.

When the market is particularly difficult to play, the time span is particularly long. At present,

Except for A-shares, other markets are not bad.

If you encounter such a long period of depression, especially if you are heavily invested, it will definitely be very difficult.

In the future, whether it is the B-share market or the Nasdaq, it is best to take this long-term difficult scenario into consideration, because this situation is bound to happen and is a cyclical problem.

I also thought about how to avoid it?

1 Appropriate diversification of investment is very important. For example, if you were fully invested in A-shares 4 years ago, and I gradually turned to the B-share market or the Nasdaq, the results 4 years later would definitely be very different.

2 Maintain liquidity and keep the liquid cash in hand appropriately, so that you have enough funds to invest at the bottom when the market is sluggish.

3 Continuously learn and study market trends, cycles and adjust investment strategies. Nothing is immutable, and flexible response to market changes is the key.

I think that through these strategies, the risks brought by long-term depression in investment can be avoided to a certain extent.

Especially the third point, it will be very bad for all walks of life as long as they stop learning, studying and understanding market changes. Continuing to rely on past empiricism and not adapting to the new market environment may lead to serious consequences.

It is also quite dangerous.