Last week, the stock market surged, and I believe many friends are very happy. With the market heating up, all sorts of demons and ghosts around us have also started to emerge and become active.

A while ago, a friend was constantly persuading me to hand over my stock account to them for management, and claimed that they could stably achieve a 50% return in one year, with the profit portion divided according to an agreed method.

Their method is, if you have 10,000 shares of a certain listed company in your stock account, you hand over the stock account to them, and they can guarantee that your total number of shares remains unchanged, while extracting funds through intraday "buying low and selling high."

When I heard this, I jokingly told him that if you had started this job 10 years ago, with an investment of 100,000, and calculated at an annualized return of 50%, after 10 years you would have 5.766 million [100,000 * (1 + 50%)^10]. If you can prove that you have 5 million now, I will believe in your investment strategy.

My friend was speechless, and in the end, I treated him to a meal to get rid of him.

The purpose of telling this story is to tell everyone:

If you are not very clear about where your profits come from, then what you think of as financial management is just a "zero-sum game."

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Stock trading is like this, P2P is like this, and some so-called financial products are also like this...Many people's investments are actually akin to flipping a coin, where they might make a profit in the short term, but ultimately, they will give it all back. The reason why we ordinary people want to engage in financial management is to improve our lives, as the growth rate of the majority's income cannot keep up with inflation. According to the CPI data from the National Bureau of Statistics, over the past three years, the Consumer Price Index (CPI) in our country has increased by about 1.5% to 2.7%. Based on the GDP growth rate in the past few years, we can roughly estimate that our country's inflation rate is between 3.5% and 4%. This means that if you have 1 million in cash and do not manage it, in 15 years, the value of 1 million will be halved, and the purchasing power of the original 1 million will be reduced to 540,000.

If you can realize the necessity and importance of ordinary people's financial management, it does not mean that you can do it well, because most people still have many misconceptions about financial management. For example:

* Misconception One:

Buying low and selling high can make money.

I once read a book called "The Spring of Value Investing in a Bear Market," which was very inspiring to me. The author of the book launched the first fund in 2010, heavily invested in Moutai, and initially, for two years, Moutai rose against the trend, and the fund's returns were good. However, in 2012, due to the advocacy of anti-corruption, Moutai was severely impacted and experienced an irrational decline, with the stock price falling from 260 yuan to 120 yuan, a drop of 60%. The net value of this fund fell from 1.2 yuan to 0.4 yuan, which can be described as "bearish global champion."

For a while, it was really "infamous," with devaluation, ridicule, denial, and abuse pouring out like a tide... Faced with all the doubts, the author not only did not take everyone's advice but also sold other stocks in the fund and exchanged them for Moutai shares, even buying Moutai with leveraged loans.

In the end, he held on steadily until 2017, when he sold out at a Moutai stock price of 700 yuan, and the fund achieved a 10-fold return in 7 years of operation!Looking at the current stock price of Moutai at a thousand yuan and a market value of trillions, do you feel that this investment is easy?

Just buy at a low price and hold it until now, and you will surely win. However, there are at least four challenges of human nature that prevent you from holding it until now.

1. During the anti-corruption period across the country in 2012, Moutai's stock price was halved. From August 2012 to January 2014, it fell to a historical bottom. During this period of more than 10 months, the account continued to lose money, and the more you insisted, the greater the loss. Such persistence makes you doubt life, and you may cut your losses and quit at any time.

2. In May 2015, the account turned from a loss to a break-even. After three years of hard persistence, the account returned to the original, and you may also clear the warehouse and stop doing it.

3. A-share experienced a big bull market in 2015. At the end of July, it reached the peak and began to fall. At this time, holding a little profit, it began to give back, and you might not be able to help giving up.

4. Even if you have passed the first three levels, when the stock price is 400 yuan, the profit is doubled, you may think that you have finally gone through the hardships and will also leave with satisfaction.

You see, as an ordinary investor, even if you were fortunate enough to buy Moutai during the 2010-2012 period, you can hold it until now, and the author is also one in a million. The author's strength lies in not only enduring the anti-corruption crash, but also enduring the 2015 bull market without selling, and finally selling at a stock price of 700 yuan, and gaining ten times the return.

Therefore, investment is not a simple low buy and high sell, and it is not a matter of luck, but to find the real "value investment" and formulate a long-term "investment strategy".

√ Mistake two:

Stock trading is financial managementIt seems that many people, when it comes to financial management, will ask, "What are some good stocks recently?"

There is a saying in the stock market: "Many can triple their money in a year, few can double it in three years, and even fewer can outperform the market over a decade."

This means that there are many who occasionally make money in the short term, but few who make money from long-term investments. Speculation and luck can earn money for a while, but it is not sustainable.

If you buy stocks without any strategy, without risk management awareness, and just blindly follow the news, hoping that your stocks will rise after building a position with a fluke mentality, what is the difference between this and gambling?

Investing and gambling are a hair's breadth apart, but the error is a thousand miles away. Not only is time spent, money lost, but also the heart is hurt. Even if there are short-term gains by luck, the final returns will not be ideal.

The recent stock market is unpredictable and follows no rules. Today, I would like to share an investment method that is very suitable for novice investors, hoping to bring you some inspiration.

This investment method can be summarized in 12 words: "Pursue value, long-term investment, and hedge risks."

The so-called pursuit of value is to look for stocks that are in line with the development trend of the economy for investment, after all, in the long run, the function of the stock market as a barometer of the real economy is still correct.

In addition to the previously mentioned Moutai, more classic examples include Vanke A and Gree Electric Appliances ten years ago.

At the beginning of this century, China established the basic economic policy of using real estate as the engine of economic development. The real estate market ushered in a golden decade and drove the development of the downstream home appliance industry. Vanke A and Gree Electric Appliances reflected this development process.Forward-adjusted the prices of these two stocks, and it becomes apparent that their increases are quite astonishing. If investors hold firmly, the returns are bound to be very considerable.

To understand long-term investment, I'll use a vivid analogy: many people have the experience of learning to drive. If you keep your eyes on the near distance while driving, you'll feel that the car is moving very fast, which can lead to panic. However, if you look into the distance, your mindset will be much calmer.

Investing is similar. In the short term, it's highly speculative and difficult to grasp. If one is too shortsighted, it will definitely affect the psyche and inevitably impact normal life and work. If you extend the investment period and focus on value, putting effort into the "dull" aspect, the results will be much better.

In addition to grasping the two key points of value and long-term, the most important thing is to hedge risks. For example, we can choose two investment instruments with opposite trends and allocate assets in a certain proportion to hedge risks.

Looking at the investment instruments currently available in the market, the ones suitable for ordinary people to hedge risks are the A-class shares of "structured funds."

Structured A shares tend to move in the opposite direction of the stock market to some extent. When the stock market rises, Structured A shares will fall, and when the stock market falls, Structured A shares are likely to rise. Friends who invest in stocks can allocate assets between stocks and Structured A shares.

For example, let's say I am optimistic about the insurance industry, believe it has great potential for development, and plan to invest in the insurance industry for the long term. Therefore, my specific approach is as follows:

Step 1: Choose a stock in the insurance industry and a Structured A, such as China Life (601628) and Insurance A (150329). (Note: The specific investment products are used for illustration only and are not investment advice.)

Step 2: Calculate the average rise and fall range of the stock and Structured A in the past month, for example, China Life (601628) is 5% and Insurance A (150329) is 2%.

Step 3: Based on the average rise and fall range of the stock and Structured A, determine the asset allocation ratio to ensure risk hedging between the two. For example, if I have 100,000 yuan, I would allocate it according to the ratio of China Life: Insurance A = 2:5. For instance, I might invest about 28,600 yuan in China Life and about 71,400 yuan in Insurance A.Step four, based on the market's ups and downs, regularly adjust the position to ensure that the ratio of China Life: Insurance A remains at 2:5. The adjustment period can be a week or a month, which can be determined according to one's own situation.

When China Life's stock price rises, sell a portion and then buy some Insurance A to maintain the ratio unchanged. Conversely, do the opposite operation. This can ensure a relatively scientific approach to buying low and selling high, overcoming human nature. If you can adhere to the above principles, you will definitely have a remarkable investment return in the stock market!

√ Myth Three:

Keeping money in the bank is the safest

Some people like to earn and save money, and they firmly believe that keeping money in the bank is the most secure. In their view, the investment world is too complex. They do not understand financial management, are unwilling to learn about investing, and are even less willing to try. They prefer to keep their money in the bank.

When it comes to financial management, some people think it's too professional. Complex calculation formulas, interwoven index charts, and daily fluctuations like a roller coaster. They don't understand it, don't want to become "chives" to be harvested by others, so they prefer to keep their money in the bank rather than get involved in financial management.

Others say, as a working-class person, it's already good to balance income and expenses, where do I have money for financial management?

Some also believe that financial management is a game for the wealthy, and one is not qualified to talk about it without 5 million.

It is undeniable that financial management is a profession, and its practitioners need to understand various knowledge such as economics, financial management, currency management, and insurance fund studies. On this basis, they also need to have a sufficient understanding of the market and economic conditions.

So do ordinary people not need to learn about financial management? On the contrary, through scientific and planned financial management, ordinary people can make their lives better and better.Here is the translation of the provided text into English:

Take a simple example.

Do you feel that your salary is increasingly insufficient? Even with annual raises, the increase is not even enough to cover the cost of a meal, and the amount of money left over is getting less and less. These are the inevitable results brought about by inflation.

However, in real life, there are too many financial novices who, out of ignorance and fearlessness, invest their money without understanding anything, only to end up losing everything. Crying out for help and lamenting their fate is of no use...

So, as a financial novice, I want to learn about financial management seriously. In the treacherous financial market, how can I protect myself from getting hurt?

The answer is only four words: Understand, then engage.

No one is born with the complex advanced survival skill of financial management; it must be acquired through continuous learning and practice. In this era of information explosion, there is no such thing as something that cannot be learned when it comes to financial management.

The fear is for those who are ignorant, greedy, and lazy; they are destined to be the "chopped scallions" for life.

Speaking of this, some people might say, although they understand the principles, they have missed so many opportunities in the past. Is it too late to start now?

Remember, the best time to plant a tree was ten years ago, and the next best time is now. Don't be afraid that it's too late, as long as you take action!