Category: Money tips Release Date: 2006-03-02
Predicted the stock market short-term trends like guess coins, Buffett talked about a short-term riches from the stock market joke: Like stocks to 220 million Americans each made at a 1 yuan coin toss coin game, guess the right people can loser of the coin to win and enter the next round, so 20 will be followed by 215 Americans to win one million U.S. dollars. However, economists will say that these 220 million Americans are replaced by 220 million orangutans, the results will be the same, there are 215 orangutans become a millionaire.
In fact, in the stock market, those who were known as "Fool Investment Law" investment approach often proved to be most effective. New York venture capital fund managers to the above questions is: "Invest in the best time is when you have the capital to let investment has become a habit, like eating and sleeping, have to invest each week If you are a lifetime investment, then you will become rich. "
While the vast majority of professionals and can not predict the short-term index can go, but almost all of the professionals who are convinced that the next stock will move upwards, breaking the 2200-point or even 3000 points, not a dream, the reason is very simple and that is compound interest factors work. Compounding interest is called the eighth wonder of the world, to A shares, for example, even if the annual growth rate of only 8% of the words, as time goes by, 30 years later, the Shanghai index from the current 1,300-point rise to 10,000 or thereabouts. If investors can consider 30 to 40 years of investment, then what justification is there for the index rose or fell 100 points, feel worried? Buy-and long-term holding seems to have become a cliche that those who experienced experts had repeatedly put forward this proposal, this investment method is simple, effective, and easy to understand, but, unfortunately, almost no one listen to this a proposal. A result, they suffered the loss of investment, so making every investment, the investors should be held in perpetuity as the goal.
From the experiences of mature markets, the stock market will not be quiet for a long time the fundamental reason is that the rate of return investing in stocks is quite good. Statistics show that, throughout the 20th century, the performance of U.S. stocks than bonds and other financial investment instruments better, and even dividend stocks, including average annual return of 9.9%, the bond is only 4.9%, the deposit as low as 3.5% ; period, the average annual inflation rate of 3%, ignoring the inflation rate on the erosion of purchasing power of money, the stock still yields 6.9%, bonds and deposits were only 1.9% and 0.5%.
In fact, we now need to do is to find some of both right where you are, no matter how many years after the assets are not worried about whom to invest, so that one day when you wake up, you will not only understand how to do it is right, but also have more wealth. Peter Lynch used to say, most of his money in his possession a stock after the third or fourth year earned, and sometimes may take longer.
(The author is Guangdong Development Fund Deputy General Manager, Marketing Development Department)
