What is the difference between A-shares and American stocks? Why do I prefer to place my long-term position in the US stock market? This is a big problem, but the core difference is actually just a few words: One is more like a financing market, and the other is more like an investment market. 2/A shares have a high proportion of retail investors, strong emotional drive, and a turnover rate that is consistently among the highest in the world. What you are studying today is the fundamentals of the company. Tomorrow, a policy, a concept, or a short essay can distort the logic. In addition, with IPO blood pumping, frequent private placements, and imperfect delisting mechanisms, good companies may not necessarily emerge, while bad companies can occupy resources for a long time. The soil with long-term compound interest is naturally inferior. 3/More obvious from the data. Individual A-share investors contribute nearly 80% of trading volume, but their profit share is much lower than this proportion. According to data from the Shanghai Stock Exchange, personal accounts held for more than 10 years have a profit margin of less than 10%. This is not a case of individual investors being foolish, it is a result determined by the rules of the game. 4/Looking at long-term returns again. The Shanghai and Shenzhen 300 has been annualized by about 5% -6% since 2005, while the S&P 500 has been annualized by about 10% during the same period. If we had invested 1 million each in 2005, the S&P 500 would now be around 4 million, and the Shanghai and Shenzhen 300 would be around 2 million. The widening of compound interest rates over time is astonishing. 5/Fluctuations and retracements can also illustrate the issue. The Shanghai and Shenzhen 300 Index fell by over 70% in 2008 and over 40% in 2015; The S&P 500 experienced a maximum drawdown of 57% in 2008, but recovered from its previous high in about four years. In 2022, it experienced a drawdown of 25%, reaching a new high in less than two years. The US stock market is not about not falling, but about being able to climb back after falling. The structure of the US stock market is also different. Normalize delisting, garbage companies will be cleared out; The shareholder culture is more mature, with the S&P 500 repurchasing and distributing over trillions of dollars annually. There is indeed a gap in these aspects of A-shares. So the configuration idea we need is simple: core positions are placed in the S&P 500 or Nasdaq 100. Long term investment is not about betting on which market is more lively, but about finding a place where money can slowly increase and patiently waiting for it to happen. The market rewards those who respect rules and are willing to gradually become wealthy.