What is the essence of the ups and downs in financial markets? 1/Retail investors lose money, their first reaction is to look for news. What did the Federal Reserve say again? Did the financial report fall short of expectations? Is the main force smashing the market? Once you find a message, you feel at ease. The attribution process itself is wrong. What is the price? The price is the most recent transaction price. It's not valuation, it's not 'how much should it be worth', it's just the number recently agreed upon by a buyer and a seller. Rising means that someone is willing to pay a higher price to buy; A decline means that someone is willing to sell at a lower price. Why would anyone be willing to pay a higher price? Textbooks will tell you that demand exceeds supply. But this answer is equivalent to not saying anything. The real question is: Who is creating the supply-demand imbalance? 4/Retail investors account for 60% -70% of A-share trading volume, but their behavior is highly dispersed. One thousand retail investors, five hundred buying, five hundred selling, with a net effect close to zero. What can truly create directional power is large funds held in concentrated positions. 5/An institution managing 5 billion cannot simply click 'buy' on the software when building a position in a certain stock. It must be bought slowly, when it oscillates repeatedly at low levels, and when retail investors panic and sell. This is called fundraising. After the fundraising is completed, the floating chips decrease, and small buying orders can drive prices. This is called pulling up. After reaching the target level, the institution needs to ship. It is also impossible to sell with just one click, otherwise it will collapse. So it must slowly sell when retail investors are excited to chase after the rise, and sell when good news appears. This is called distribution. After being distributed to retail investors, high priced chips are concentrated and prices naturally fall. 7/Attract funds, raise, distribute, and decline. Then cycle. This is the underlying operation of financial markets. News is not the cause of fluctuations, it is the tool of institutions. When good news comes out, it is often when institutions start selling. What signal is reliable? Turnover Institutions can create false price fluctuations through inversion, but they cannot create real transaction volumes out of thin air. Vikov said: Volume is effort, price changes are result. A significant drop in volume but a rebound in volume implies that selling orders have been absorbed; An increase in volume but a decrease in volume indicates that buying orders are being sold out. So what retail investors really study is not 'why it's rising', but 'who's buying'. But the vast majority of people do not have the time, energy, or information advantage to judge this. This is a natural disadvantage for retail investors. What about ordinary people? My answer is simple: don't play this game. Since you can't win against the banker, then become a shareholder of the banker. Buy the S&P 500, buy the Nasdaq 100, buy the growth of the entire market. 11/This is the essence of index investment: you admit that you have no advantage in individual stock games, so you buy the entire market. You are not chasing the ups and downs, you are having long-term growth in human economic activity. 12/Brothers, stop studying the news, stop studying the K-line, and stop studying the main force. The purpose of these things is to make you feel like you have a chance. The real opportunity is to hold onto VOO and QQ for a long time, and then eat and sleep.