Gold and Forex Investment: Why Are Retail Investors Always the Ones Getting Hurt?
Introduction:
With China's economy booming and further integrating into global markets, more investors are moving away from stocks and diving into gold and silver investments. Yet, why do most precious metal investors end up losing money? Li Xingmiao attributes it to the following three reasons.
Today, the choices in spot gold trading have become increasingly complex due to rapid market expansion and extreme volatility. New terminologies and concepts about spot trading emerge endlessly; analyses of gold performance and investment behaviors flood newspapers and the internet; and gold rating systems from different institutions constantly evolve.
Guidance:
Most investors jump into precious metal markets without fully understanding them, relying solely on impulse. Spot gold is an investment product, not a speculative one. Its market trends are driven by a $20 trillion market, eliminating the possibility of market manipulation. Thus, knowing how to collaborate and operate is key. Amid countless platforms and so-called "experts" in China, many lack experience. Hence, choosing a reliable platform and a skilled investment analyst is crucial. A good analyst is like a wise guide—though investors must sharpen their judgment to find one.
Mindset:
Most investors lose money not because they misread the market, but due to two main reasons:
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Failing to set stop-loss points: As the saying goes, "fear attracts what you dread." The market is ever-changing—the more you fear losing, the more you will. Setting stop-losses is essential for risk control.
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Greed turning profits into losses: Markets are unpredictable. One moment you're profitable; the next, you're in the red. Once reasonable gains are achieved, investors must resist greed.
Follow the Trend:
The market doesn’t bend to your will. When you think a rally or decline is over, it often has further to go. Investors must carefully analyze market trends and heed analysts' advice. If you "fight" the market, it will play games with you—and you’ll lose. Thus, following the trend is rarely a mistake.
Sometimes, conquering the chaotic market doesn’t require chasing tips, frequent trading, or enduring twists and turns. Like John Bogle, adhering to commonsense principles can make investing far more effective.
Closing:
A good analyst doesn’t just offer advice but teaches you to learn independently. Stay disciplined, trade rationally, keep greed in check, and follow the trend to succeed. The above reflects Zhou Weiyu’s personal views, hoping to aid fellow investors. For further discussion, visit my blog.
