China's stock market has been in the doldrums in recent years, and many friends have been halved, even losing more than 80% or 90%, resulting in huge losses.In the A-share market, more than 95% of retail investors do not make money, that is, 90% of retail investors have never made money.

Retail investors have never made any money?

I did say something similar, but this conclusion is not mine. Whose conclusion is it? This is what Professor Robert Shiller, a famous professor at Yale University, who won the 2013 Nobel Prize in economics, said. Professor Robert Shiller, who studied the volatility of the stock market all his life, published a book called irrational exuberance in 1998, and he predicted the bursting of the dotcom bubble.

According to the research of many economists and financial scholarsIndeed, only about 5% of retail investors outperform the market in stock markets around the world. In many markets, retail investors account for less than 5 per cent of investors who can outperform.

Some scholars have done research on retail investors in Taiwan. They found that the reason why retail investors lost money27% were due to wrong stock selection and trading timing, and 32% were retail investors who contributed to institutional investors and securities firms.Their frequent transactions actually pay a lot of commission to the brokerage.34% is due to frequent trading by retail investors.Pay all kinds of taxes to the government, such as stamp duty and so on.Another 7% is because investors are unable to choose the right time to invest.

In fact, many economists and financial scholars have done research on China's A-shares, which is generally similar to the situation of retail investors in Taiwan. So, as mentioned earlier,93% or 95% of retail investors have never made money, which is generally true.Many friends, especially retail investors, never calculate the time cost of investing in the stock market, let alone the interest they have lost.

Why do retail investors lose money easily?

In recent years, there are six reasons for the study of retail investors by behavioral economists and financial scholars.

All retail investors basically lack professional investment experience.

Lack of professional analytical skills

Now we have thousands of stocks, there is no professional investment experience, no professional analysis ability, how do you choose stocks? Is this stock company worth investing or not worth investing in? So most retail investors basically rely on luck.Some friends happened to be lucky to buy a stock and made a profit. They were so happy that they thought they were good at investing in stocks.

But he never thinks about when he loses money, even when he tells stories when he loses money. In fact, friends who invest in stocks think about the money they have lost and earned over the years, coupled with the cost of time, the cost of interest, and the energy I mentioned earlier. I think many friends will not be happy or even disappointed with their investment performance.

Overconfident

They think they are going to be Buffett, who is an investment myth in the whole history of mankind. Why did Buffett become the god of stock? Greenspan, the former chairman of the Federal Reserve, once made fun of Buffett, saying that the whole world envied Buffett to become the richest man in the world by investing in stocks, but he did not envy Buffett at all. He said that Buffett was just the event with a very low probability printed on him.

We have more than 1 billion investors around the world. We can calculate the probability, and every time we buy at a low level, we choose the right stock and the right time to buy and sell.The probability may be only a few 1/100000000 or even one in a billion. So there happens to be one person who catches up with the best time, this person is Buffett, not Buffett has a magical ability.

Many investors believe in myths.

They believe in some of the success stories they have heard, and they selectively forget the failed investment stories. When everyone succeeds in making a stock, he will brag to his friends and people around him about how he is successful, but he generally does not mention the lesson of his own failure. This is a basic feature of human nature. So I often say that many of us Chinese don't believe in science, they believe in myths.

Blindly pursue high returns and ignore risks

We tell you about this monetary and financial course, in fact, we hope that you will make it clear that risk is always accompanied by all financial products, high risk and high return, low risk and low return. But many of our friends are only willing to pursue high returns and forget high risks, or even forget risks at all.

Retail investors lack the investment strategy and determination, and operate frequently.

The turnover rate in China's stock market is more than ten times that of the United States, and many investors want to trade several times a day for all kinds of T plus zero operations and so on. With such frequent operations, in fact, you didn't make any money at all, just paid a lot of commission with the brokerage and paid a lot of stamp duty and other fees to the state. So it is a pity that our retail investors are basically working with brokerages and the government.

There are still many defects in market supervision.

Many retail investors have been cut off their leeks by large investors. We have some institutional investors and large investors, and their practices are very black. They use a variety of means to tempt retail investors to throw in, and then hold retail investors in a high position and sell their stocks, which happens all the time.

Some suggestions for retail investors

Investment is a very professional thing. Without five or ten years of hard labor, you can't feel it at all. So for ordinary friends, if you don't plan to become a professional stock investorIf you are not going to delve into investing in stocks for ten years, I advise you not to invest in stocks.

In particular, many of our friends have their own jobs, so you don't have to speculate in stocks. Because stock speculation distracts you, not only can you not do your job well, but once you suffer losses, it may even disrupt your whole life plan.

So many friends of retail investors, in fact, I advise you to quit and choose a more stable investment variety and investment method that is more suitable for you. Of course, many friends will not believe me here, because there are always many people in the world who believe that wealth is derived from risks and are willing to take risks. This is of course everyone's freedom, and there is nothing wrong with it.