Lay the retirement capital! Zhuchun, an investor who has worked in Huaer Street for nearly 30 years: 2 kinds of errors to avoid when buying stocks

Editorial: In the era of inflation and smaller and smaller, how can we have a stable pension? Zhuchun, an investor who has worked in Huaer Street for nearly 30 years, suggested that the US stock standard 500 index has an annual return on the past 30 years of about 9%, and those who have no time to study stocks can consider it. The correct investment depends on profit and time. "Only by the heart of one's heart, you cannot fight."

In the financial market, there are countless people who desire wealth. Those who succeed will have a full bag and will be able to come; those who fail will have a bad ambition and will have scars. The market is like a war, "Only the heart of a family cannot fight a war." The poet Zhuchun described it in his poem "Hual Street". Zhuchun, whose real name is Qi Yan's family, has been working in finance in Huaer Street for nearly 30 years. He has served as a bank and fund company in several banks and fund companies. He is now the president of the Science and Technology Department of a large financial group in the United States. He is about to retire and has accumulated years of investment experience and has also witnessed the ups and downs of the market.

He observed that in this era when the gap between wealth and wealth is growing, stocks can be a good way to maintain wealth. However, investment is not a gambling game, and people who often make mistakes will quickly pay off their capital and exit the market. When buying stocks, how can you not make money and make more and more wealth?

Two types of wrong and cheap companies that should avoid buying stocks. Good companies that can make profits are too early.

Looking back on past investment history, Zhuchun mentioned that there are two most common mistakes in personal investment: one is to buy bad stocks and the other is to buy the right stocks, which are too early.

He spent a lot of money and learned the principle of "do not buy it at a low price." For example, during the Internet bubble in 2000, he bought stocks of an online toy company called eToys.com at a price of $1 per share, and bought more than 10,000 shares. I thought I was cheap, but I didn’t expect that in 2001, the company broke down and spent more than 10,000 US dollars. "If a stock price is too good and others dare not touch it, you should think about what's going on. It's not that you are too smart, it's that there are problems."

In addition, he also mentioned that many Chinese companies have been listed in the United States through reverse mergers. Such listing procedures allow the company to avoid many formal financial reviews and allow investors to see beautiful account numbers. He also bought a few at one time, and his stock price fell sharply later.

This type of unreliable Chinese company is the most typical example of Luckin Coffee, which was once called "China Starbucks". Luckin Coffee, which once had a stock price of up to $50 in 2020, posted news about fake accounts in the middle of the year, and its stock price bottomed out. "It is best to avoid touching companies that are mixed with fish." Zhuchun gave advice.

Good stocks are sold too early, which is another extremely difficult bias. He once bought Apple shares for $10 and sold them at $25. Although I made money, if Apple's shares were kept to this day, the stock price had exceeded $140.

"Hurrying to sell the stocks of good companies is like finally finding diamonds, but I don't know how to keep them." Zhuchun pointed out that looking at the stock price trends of good companies with potential development in recent years, such as Micro and Google, have almost continued to rise. If the holdings in your hands rise from $100 to $200, it may be satisfying. But if you keep it unchanged, the stock price will still have a chance to rise to $300 or $400.

However, if a good company fails, what should I do? Zhuchun believes that "people" are the biggest variables in a company's business. As long as a company's excellent operating team does not change, its operation will not change much. For example, Apple's stock price fell due to Jabers' departure, and after Jabers recovered, the stock price plummeted again. The stock price of WeChat has been weak since 2000 until now CEO Satya Nadella led WeChat to develop towards cloud service.

"Operators are like kings. A good emperor makes the kingdom excited and expands the picture. The foolish monarch will lead to a change of dynasty." Zhuchun suggested that in addition to major changes in the operating team, do not listen to news casually and sell the shares of the good company. If you really want to sell, you can also leave some of your holdings and verify whether your judgment is correct. "Otherwise, after the full sale, the stock price continues to rise, and you will not be allowed to enter the market again."

Entering the market during the financial crisis, you should not forget "Cash is king".

Every time the stock market falls sharply, wealth will be reshuffled. Zhuchun mentioned that the financial aura entered the field in 2008, which allowed him to lay a foundation that is enough to retire today. He described the market at that time: "It makes people feel like children enter the candy store, and there are many cheap stocks to buy."

From history, the stock market always has a bear market and a bull market interaction. After a big surge, a big drop, and vice versa. In a crisis, how to determine which companies are worth buying? Zhuchun presented an actual example: Before and after the financial outlook, Citibank's stock price fell from more than $500 to a low of $10, while JPMorgan Chase fell below $15 from a high of more than $50. Which stock should you buy at this time?

Most people will choose to buy Citi stocks, and the expected stock price will rebound to a high of $500 after the financial outbreak. However, in 2021, Citigroup's shares are about $70 and JPMorgan Chase is $165. Financial crisis is actually the best test for enterprises. A company's share price declines may be a sign of financial fragility.

Zhuchun further analyzed that from the perspective of profit performance, Citibank's quarterly revenue was a big profit, and even a dumb account. On the contrary, although JPMorgan Chase's profits were also affected, the loss was not large. When the economy is good, companies with poor financial resources are still busy dealing with past issues such as account and personnel, and companies with stable foundations will take advantage of the opportunity to occupy the market.. This is why the two companies that have also been founded in bear markets will have completely different developments in the future. "As Buffett said, the tide recedes, only when it comes to know who is not swimming in a pants."

According to market definition, the so-called collapse refers to the stock price falling 20% from its highest point, and the correction is a 10% decline. The famous bear market in history will appear once every 7 to 14 years, and is the best time to enter. There is a famous saying in the market: "Cash is king", which means that you must retain some cash at any time in order to use it vigorously at the moment. How much cash should be retained in the

personal asset combination? Zhuchun believes that everyone has different financial conditions and there is no standard answer to this question. But he proposed an interesting point: to buy stocks, you have to buy a balance point of "high no matter whether it rises or falls." On the one hand, you have a lot of money, and you are very interested in making profits when you rise. On the other hand, you have enough cash and can wait to buy it when it falls. "In this way, the ups and downs of the stock market will not affect your mood."

The most suitable investment method for ordinary people. Holding a standard 500 index fund for a long time will double your property.

If there are thousands of file marks in the stock market, which company should you buy? Zhuchun believes that "the simplest way for those who don't have time to study the stock market is to buy the Target 500 Index Fund." Target 500 covers the top 500 companies in the United States, and the statistical data shows that the annual return on the Target 500 over the past 30 years has been about 9%. Between 2020 and 2021, the return rate of the SPC 500 is as high as nearly 16%.

Zhuchun mentioned that there is a "72 rule" in the stock market. When the investment return rate reaches 7.2% per year, the investors' assets will double every 10 years. Therefore, he suggested, "If your investment portfolio has a return rate of less than 17%, it is better to invest directly at a general price of 500."

He also reminded that some people will choose stocks through technical analysis and study historical data to find time to buy and sell. But today's technological progress, "if a model can make money, Huaer Street will write it into a program for computer operation." He said bluntly that successful technical analysis is mastered in the hands of a few counter funds, and small investors are difficult to gain.

"Short-line entry and exit will make people feel that they are very smart. But for a long time, you will make money by buying it if you don't sell it." Zhuharu pointed out. For example, he has a friend who bought Tesla stocks that have been popular in recent years and is keen on short-term buying and selling poorly. However, if you do not sell it after the initial purchase, the profit will be more attractive!

Life and company assets are mostly more important than tangible

I have been working in finance for a long time, and Zhuchun is not to mention it. There are many dazzling scenes on Huaer Street. A life without having to worry about money is happy, but this does not mean that a happy life must have endless wealth. He mentioned that there is a somewhat sensible "side effect" in economics —— after a certain point, the joy brought by money will not increase. "The pension is $200,000 or $1 million, of course there is a difference. But the degree of happiness may be different from $1 million and $10 million."

Although he loves work, he knows that the competition in Huaer Street is fierce, and he has prepared economic preparations for retirement at any time a few years ago. After leaving his post, he planned to live in different cities for several months and experience the cultures of various places. In addition, without the economic concerns, you can also spend more time on his favorite literature. As for money, just use it without over-pursuing it.

He believes that the principle of investment is actually suitable for life. A good company will have many intangible assets such as software, patents, etc. These intangible assets can bring more benefits to the company than tangible assets such as buildings and equipment. In a person's life, tangible assets such as money and houses are important, but intangible assets such as friendship, friendship, and love will bring true happiness. It is a smart way to make money in an effective way, but not be enslaved by money!

Original text: Lay the money for retirement! Zhuchun: Investing in the US stock market standard 500 index, selecting stocks for free and double their property