In 2020, the stock market is getting rough.
This seems to be the reason why the relationship between the United States and Iran is deteriorating and the vigilance against the corona virus is increasing.
Investors like us will lose money if stock prices fall. When you lose money, people throw away stocks and sell them or stop operating assets.
I have been in the stock market for about 10 years, but whenever I see a person who stops asset management by saying, “Never quit stock,” I feel “wasted” every time the stock plunges.
Stocks trade when stocks fall
The personal question is, “Why do people want to sell when the stock price drops?” Is that. The original stock investment buys stock that is ‘the right to receive a portion of the assets and profits to be invested’. And increase your return by receiving a portion of your return on investment.
In other words, investing in stocks is nothing more than ‘buying profits’. And we are making more money and increasing our profits little by little. Earnings increase to compound interest, which means that you will earn considerable profits.
Nevertheless, if the exchange rate plummeted, “I want to sell stock!” There are a number of moves. In other words, the number of people buying and selling income will increase. This is not reasonable.
Historically, the average rate of return on a stock investment is “interest rate + 4% to 5% per year”. Now, since interest rates are almost zero, if it is a stock that can expect a profit direction of more than 4% to 5% per year, shouldn’t we keep holding it rather than recklessly selling it?
It would be nice to check the number of ‘PER’ when checking stock information sites, etc. As a guideline, stocks with a PER of less than 20x to 25x can be expected to rise in the long term.
Not surprisingly, stocks are cheaper to buy and sell at higher prices. So the idea of “I want to sell because the stock price has fallen” is far from the royal road and is almost the opposite.
The secret to not losing money from a stock crash
There are two important points. One is not to sell stocks for emotional reasons such as “because stock prices are falling and I feel bad.” Even if the stock price falls, the stock price will return if there is no obstacle to the business to be invested.
It is a property engulfed by temporary emotions, so it sells stocks. In order not to be like that, it would be good to think, “If I was selling this stock even if the share price did not drop now?”
The other is, “I don’t buy stocks that are likely to be anxious just because the stock has fallen.”
If you have good stocks, if the stock price goes down, you want to buy rather than sell.
This is because the analysis before buying the original stock, which is unsettling when the stock price falls, is sweet.
“I don’t know if it’s good or bad, but I’m buying stock for some reason”, and I’m just worried about the stock price dropping a little.
If you do it properly, you will hold two heavy fists even if the stock price declines somewhat. It’s clear that the stock price is falling and letting it go helpless.
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When the exchange rate surges, we are surprised and forget the basics. As a result, you make mistakes that you don’t think so cool.
The basics of investing in stock are simple. It’s two things: “buy income to buy stock”, “buy cheaply, and sell cheaply.”
I want to steadily increase my money without forgetting this basic.
