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Source: Beijing Business Daily
The market continues to strengthen. The Shanghai Index stands at 3100 points. The safest way to make money in a strong market is to hold shares. As long as the target is of high performance, it can basically get a good return on investment. Do not speculate in the short term and exchange shares frequently. At that time, you may encounter the dilemma of earning only the index but not the money.
The three major A-share indexes continued to rise, and the trading volume in Shanghai and Shenzhen markets exceeded one trillion yuan again. The trading atmosphere was hot, and more than 4500 stocks in the two markets rose. The current market situation fully conforms to the characteristics of a strong market.
When the market is in a strong trend, the most appropriate investment method is holding shares, commonly known as holding shares. This is because in the general rising market, in the absence of bad news, the rising probability of individual stocks is far greater than the falling probability, and most stocks will outperform the index performance under normal circumstances. Assuming that the cumulative increase of the interval index is 5%, the cumulative increase of most individual stocks will exceed this increase, which also means that if investors choose to hold shares unchanged, they can easily achieve investment returns of far more than 5% in the interval.
As the saying goes, forging iron also needs to be hard, and there is also a basic premise for holding shares "to earn money", that is, the holding target must be of high quality. The best situation must be to hold blue chip stocks, which are characterized by stable growth in performance, reasonable P/E ratio and moderate proportion of cash dividends. Especially in a strong market, blue chip stocks are more likely to outperform the index. After all, most blue chip stocks belong to constituent stocks, which actually contribute to the index. Take the recent period as an example, the continuous strength of the index is closely related to the strength of securities companies' stocks, and investors who hold securities companies' stocks in the recent period can also obtain excess returns.
In addition to blue chip stocks, some small and medium-sized stocks with stable fundamentals can also be covered. Generally speaking, most small and medium-sized stocks fluctuate with the fluctuation of the index. While the index is stronger, the performance of small and medium-sized stocks will not be too bad. Moreover, the leading stocks hyped by some concepts are often small and medium-sized stocks. If investors happen to hold them, they can also obtain excess returns.
In contrast, the "black five" with poor performance fundamentals are not included in the list of stocks. These stocks basically follow the decline but not the rise. If you hold "black five" stocks during the period of market strength, you will lose the market with a high probability of earnings during that period, and it is also easy to have a risk of explosion.
There is a saying that the apprentice who will buy is the master who will sell. The important factor that determines the income gap between investors is more the timing of selling. When buying at the foot of the mountain, selling at the foot of the mountain, or selling halfway up the mountain, there are always shareholders who beat their chests and feet at the big bull stocks. In the end, they are not good at covering stocks. No matter how good the stock is, it takes time to reflect the return on investment. Being impatient can't eat hot tofu. Frequent short-term trading actually amplifies the investment risk.
If it is the best solution to do T or band trading in the "monkey market" that is jumping up and down, then in the strong market that is rising unilaterally, the best solution is only to hold shares.
Some investors are used to short-term trading, but there are many drawbacks of frequent stock exchange. Frequent transactions mean more service charges, especially for ultra short term players. In addition, frequent stock exchange may face more investment risks. In fact, the probability of stepping on the thunder is very small if you hold a normal stock for a long time. But if you change shares every day, it means that you may face different investment risks every day.
If you want to dance with bull stocks, the only way is to be patient and cover stocks. If you buy and sell with a short-term perspective, you will miss any bull stocks.
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Editor in charge: He Songlin
