A reader commented:

"Although the bear market is severe, buying the CSI 300 now during a bull market should be fine, right? Buying the ChiNext 50 should also be fine, right? Even if a bear market comes, as long as we can hold on, when the future of China's economy improves, we can still break even and make a profit, right?"

This logic is not wrong, but for this logic to hold and be faithfully executed, there is one very important condition—investors must be able to withstand market disturbances during this process, and as the stock market fluctuates, they must try to shield themselves from the temptations of psychological changes and emotional shifts.

Let's first look at the suggestion to buy CSI 300 index funds or ChiNext index funds mentioned in the comment.

For the vast majority of people, if they are optimistic about the overall trend of the stock market in the near future, this is actually the best investment approach.

This is something Mr. Buffett said decades ago, and he has been saying it for years; I believe he will continue to say it in the future.

However, over the past decades, many people clearly understand this principle, yet they either cannot do it or simply do not want to do it.

Why?

In Mr. Buffett's own words: because the vast majority of people do not want to become rich slowly—this has been validated countless times and will continue to be proven remarkably accurate in the future.

Back to the A-shares.

If we assume that we are currently in a bull market, in my personal understanding and judgment, it is still only in the early stages.

We can look at the stocks in the market; many are still lying flat on the ground, not moving at all. At this stage, everyone's emotions are still relatively controlled and "calm."

But after a while, as the market gradually enters a "better situation," the stocks that were originally lying flat will start to stir, and emotions will begin to heat up.

At that time, it is very likely that even a poor stock could see a rise in just one or two days that exceeds the gains of the CSI 300/ChiNext from last September to this September.

At that point, as holders of index funds, will they still be able to withstand this stimulus and maintain their current mindset?

But this is just the appetizer.

What does it mean when stocks start to stir? Gradually, we will find that even the people around us start to stir: a passerby who usually wouldn’t be noticed suddenly becomes a "stock god." Even though they cannot understand net profit or free cash flow, they can point out which stock will rise, and the next day, that stock really does rise.

You can't help but be convinced!

Watching your carefully selected index fund crawl like a turtle day by day while others randomly pick stocks that jump like rabbits, you can't help but start to doubt whether there is indeed something wrong with your approach.

The more you think about it, the more frustrated you become: why can those kinds of people pick good stocks? I am much better than them and fully capable of picking better stocks…

So you start to regret why you are still holding onto index funds and quickly decide to liquidate your index holdings and try picking some individual stocks. This step marks the addition of another member to the "herd."

What happens next is what another comment mentioned:

When the index reaches 6000 points, almost everyone in the stock market makes money.

At this point, no one believes the bull market will end; everyone believes tomorrow will be even better.

If investors who are making money leave the market at this time, they will definitely be laughed at, humiliated, and ridiculed.

"I" want to leave the market. But shortly after leaving, the stock market rises to 6100 points, then 6200, 6300, 6400…

Until it rises to the point where "I" hate myself for being so shortsighted. Why am I so lacking in "vision"? Finally, one day, unable to resist giving up this once-in-a-lifetime "opportunity," I re-enter the market. This time, re-entering marks the addition of another member to the future army of suffering.

At this point, someone shouts that 8000 points are not a dream.

It is very likely that they will be fiercely criticized: this is pessimistic about the Chinese capital market; we should at least rise to 10,000 points. The U.S. stock market has experienced a bull market for over a decade, and the Nasdaq index has multiplied many times. And what about us? The Shanghai Composite Index, starting from 3000 points, would only be a little over three times if it rises to 10,000 points.

Do you have no confidence in the Chinese stock market? No imagination?

From then on, there are no more "pessimistic" voices in the market; the vast majority of people enter a frenzy mode.

In the end, the vast majority of people end up losing money.

Is it possible to escape this trap?

Yes.

For investors in the crypto ecosystem, it might be worth examining your past experiences:

When you bought Bitcoin or Ethereum in the past, did you buy more when the price was high, emotions were hot, and the market was excited? Or did you buy more when the price was low, emotions were cold, and the market was quiet?

In the past bull market, when other "meme coins" surged, did you exchange your Bitcoin and Ethereum, which were originally not allowed to be touched, for "meme coins"? Or did you completely ignore the surge of "meme coins"?

If in both situations, the choice was the latter, I believe it is entirely possible to escape the emotional trap of making money in A-shares; but if it was the former, then caution is warranted.

As for the statement, "Even if a bear market comes, as long as we can hold on, when the future of China's economy improves, we can still break even and make a profit," my view is that if a bear market comes, I cannot judge whether we can break even in the next ten years. But given a little more time, I believe that in fifteen years, the national fortune will rise again, and it is highly likely that we will break even.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。