Basic Principles of Stock Investment and Following Market Makers

Common issues among retail investors often include holding medium- to long-term stocks for too long and being reluctant to cut losses in short-term trading. For medium- to long-term investments, they require higher patience from investors, necessitating a certain period of holding and waiting. In contrast, ultra-short-term and short-term trading primarily test investors' determination, so decisive action is essential.

In the stock market, bear markets usually dominate. Therefore, investors should focus on medium- to long-term investments during bear markets, while paying more attention to short-term and ultra-short-term trading during bull markets. It’s important to note that a major bull market typically takes seven to ten years to emerge, while a minor bull market usually lasts around three years. Thus, investors should remain calm and patient during the investment process and not expect every day to be a major bull market.

The process of stock trading requires a combination of learning and practice. Novice investors are like new drivers—they need continuous learning and practice to improve their skills. For seasoned investors, they have accumulated a certain level of experience and knowledge, much like experienced drivers who can better navigate market changes. For new investors, not experiencing a full cycle of a major bull and bear market is incomplete, as such experiences help them better understand the market and investing.

China’s stock market has a certain degree of speculation, along with some elements of value investing. This means that stock price increases may not directly correlate with a company’s actual performance. However, stocks with investment value will inevitably attract the attention of major funds and eventually rise. Therefore, investors in the stock market should prioritize value investing and seek out stocks with potential. Overall, stock investing is a process that requires patience, determination, and continuous learning. Investors should develop appropriate strategies based on market conditions and their personal circumstances.