Self-Cultivation of Retail Investors
1. Blindly Following Trends
Retail investors often lack independent investment logic. They always see others making money or hear about some investment "opportunity" and rush in, fearing that they might miss out on a chance to get rich. However, the real high-return opportunities are often already seized by experienced investors, and by the time retail investors enter the market, it is usually at a high point. This behavior is akin to chasing prices up and down, which likely results in buying high and selling low, ultimately being ruthlessly harvested by the market.
2. Short-Sighted Mindset
Most retail investors lack long-term investment planning and focus more on short-term quick returns. They might feel smug about making small profits once or twice, but they overlook the long-term fluctuations and cyclical patterns of the market. This leads them to be unable to hold onto quality assets, often getting shaken out during price volatility, thus missing genuine growth opportunities.
3. Emotional Trading
Fear and greed are the two major driving forces behind retail investors' actions. When the market rises, they fear missing out on opportunities and hurriedly buy; when the market falls, they fear further losses and rush to sell. This irrational behavior causes them to consistently buy at high points and sell at low points, repeatedly falling into a vicious cycle of losses.
4. Lack of Risk Control Awareness
Retail investors often adopt a "get rich overnight" mentality, betting all their funds on a so-called "potential stock" or single investment, even increasing leverage through borrowing. When investments fail, the lack of a diversified risk strategy leads to devastating blows, and these lessons often come at a painful cost.
5. Frequent Trading
Retail investors believe that frequent buying and selling can yield more profits. They watch short-term market fluctuations all day and rush to act at the slightest market movement. However, frequent trading not only incurs high transaction fees but also prevents them from benefiting from the long-term growth of their assets, and emotional trading often results in significant losses.
6. Superstitious Belief in Rumors
Many retail investors believe in "insider information" or "expert tips"; they hastily invest money when they hear recommendations from others. The outcome, however, is that these so-called "insider insights" are often unreliable, and the actions of retail investors become tools for market manipulators to profit.
