Introduction To Stock: What Is The Purpose Of Stock Speculation?

For what purpose, get rich and experience life? Making clear the purpose of stock investment is the key to successful investment. Without a definite investment objective, investment activities will become difficult, interesting and even dangerous. Especially for stocks that are highly profitable and risky, it's like diving, so it's best to go with your eyes open. "Why do I want to speculate?" There are various answers to this question, which is a good thing. If you have not seriously thought about this question and fail to answer it, you may have more trouble. Stocks are High yield and high risk Investment is like diving, so it's best to go down with your eyes open. Making clear the reason or purpose of stock investment is the key to successful investment. Without a definite investment target and monitoring, it is possible to make investment activities difficult, interesting and even dangerous. Of course, the purpose of each person's stock speculation is different, but the purpose of investment is basically the same.

　　 To lead a decent life after retirement.

Although our country is already building a social pension system, it is far from perfect. No one can guarantee that you can live comfortably and comfortably with your pension. Even after retirement, you can be sure that the receipt now seems to be a large number of pensions, but the actual purchasing power of the money when you retire may be greatly reduced by inflation. In this era of uncertainty, investment is a necessary tool to ensure your decent retirement life. There are three important investment criteria for investors who focus on strengthening retirement protection:

1. the farther away you are from statutory retirement, the more time you will have to increase your wealth. Investors need to always remember that you are racing against inflation. If you do not invest and allow your wealth to grow faster than the annual inflation rate, the quality of life after retirement may be greatly reduced.

2. the longer you invest, the more attention should be paid to risk. This means that you should invest in fixed income or low risk return stocks (with stable dividends). On the contrary, if you start investing earlier, your risk tolerance is relatively large, and you may get more returns.

3. the sooner you start investing in knowledge, the easier it will be to invest. Although you can choose to rely entirely on professionals to help you manage your finances, in fact, qualified and conscientious professionals are hard to find or pay a lot of commission. If time permits, it is best to invest in knowledge and manage their own wealth.

For short term. Financial objectives

Sometimes, the purpose of investors' investment is not entirely for future retirement. It may be just to achieve some short-term consumption goals, such as buying a new car after a year, or going abroad with a girlfriend on the next golden week. Wouldn't it be better if we could use investment profits to meet these consumer demands without using bank deposits. The so-called financial goals, in addition to investing in financial management for future decent retirement, including increasing short-term income, let us buy what we want and make life more comfortable. Therefore, long-term investment and short-term investment are all needed. Investments to achieve short-term financial goals can be very exciting because of challenges. In order to see the effect of investment in a relatively short time, investors must bear great risks. Therefore, the foundation of investment knowledge must be solid and the choice of investment varieties should be very precise. Especially when choosing those growth stocks, it is necessary to analyze their future performance growth from various aspects. If your short-term financial goals are not very high and your funds are also ample, you can choose stocks that are stable dividends, though the returns will not be too high, but the risk is relatively small. This should be the safest investment strategy. Of course, due to various reasons, many people know the advantages and necessities of investment, but have not started their own investment career. First, it is limited by personal financial resources. For example, in addition to your daily expenses, your income should be used to repay the mortgage, and there is no extra money for investment. If we use fixed expenditure to invest, we must be very careful. We must ensure that we can maintain value and increase value, and can realisk at any time. In fact, there are still some investment products in the market, so that you can make money with definite purpose, and can also generate profits within a definite time, such as bonds and money market funds, such as fixed income or bottom guaranteed financial products. Two, the lack of investment knowledge is the most common reason. Indeed, if investors know nothing about investment knowledge and act hastily, losing money is certain. But learning and mastering investment knowledge is not as difficult as most people imagine. Peter Lynch, the investment guru, said: "as long as you have junior high school math level, you have the intellectual requirements for investment." In view of this, most people have no reason not to invest. {page_break}
 

　 Is stock speculation just to get rich?

We can not accurately predict what will happen to companies and stock prices in the next 12 months, but we can judge their future trends based on comprehensive and objective information. It is precisely the judgement of the future trend that we buy stocks to buy. The contradiction between these two laws makes the stock market full of profit opportunities. The charm and passion of investment lie in making our judgement consistent with the future trend of stock market or stock price, which is the fundamental reason for the stock market becoming rich. Stock investors want to buy low and sell high and get profits. By holding stocks like China Merchants Bank, Vanke A and Suning appliances, which can map China's high economic growth, we can share the fruits of their performance growth, which is reflected in the price differential return of stock price rise. From this perspective, the purpose and idea of getting rich seem very easy to achieve, but deep thinking will not be so simple. If you take a good look at China Merchants Bank and buy the shares of China Merchants Bank, there must be other investors who are not optimistic about China Merchants Bank and are willing to sell their shares, so that you can have the shares of China Merchants Bank. On the contrary, if you think that the price of the stock of the China Merchants Bank is overvalued and therefore need to sell its stock, there must be an investor who thinks that the stock price of the Bank of China is undervalued. If you want to buy it at the price you quoted, you can change the stock into cash. Both sides of the transaction think that their buying and selling judgments are correct, but the actual situation is that the two sides of the transaction will inevitably make mistakes and become losers or relative losers. Since there must be a wrong side, why do they think they are right in the transaction? To understand this problem, we must first understand that the analysis of company value or reasonable stock price is based on the expectation of the future, and there is uncertainty in the expectation itself. We can not even accurately predict what will happen in the next 12 months, let alone what the company will become in the next 5 or 10 years. Unfortunately, many of the underlying foundations of investment decisions are finally proved wrong. Investors who are either buying stocks may be too optimistic about the company's prospects or investors who sell stocks may be too pessimistic about the company's future. When these two situations arise, they actually provide investors with the opportunity to make profits. In fact, such opportunities are everywhere. The biggest optimistic forecast error in the past ten years is the Internet bubble at the turn of the century. Investors' expectations for Internet Co are constantly increasing. It is believed that the subversive effect of the Internet is everywhere, making the market value of Internet Co with a profit of only tens of millions of dollars, such as YAHOO, far exceeding that of GM cars with billions of dollars in profit, reaching an incredible $100 billion. The corresponding traditional industry stock valuation is going down all the way, and the market seems to think that the business of these traditional industries will be replaced by the Internet. At that time, if you are also optimistic about the market expectations, buying Internet stocks, your investment decisions will become a chance for others to make profits. Similarly, when the market is overly pessimistic, other investors will increase their chances of making mistakes and making profits. For example, in 2004, the MBO scandal broke out in Yili stock (600887), which caused the stock price to fall sharply. This is normal, because no one knows what will happen next and how much it will affect the value of the company. Choosing to sell hedge is the right decision. But when the stock price falls to the lowest point in history, is it really serious to think seriously about it? Even in the worst case, the company's profits and assets are not trustworthy, and it is likely to shrink dramatically. Well, we don't need to estimate the price earnings ratio and the market rate, and use the market rate to estimate the value, because sales and market share are real. Every day we can see that consumers get milk from Erie on the shelf. Tens of thousands or even more people's business and livelihood depend on the sale of Yili milk. At that time, the sale rate of Yili stock was only 0.42, and the normal sales rate of similar companies was about 1 times. Obviously, the value of Yili stock is seriously underestimated, and investors who buy stocks become winners. Over the next two years, Erie shares rose 300%. The market, or participants in the market, often make mistakes, which is why stocks are active or positive. Investing in stocks The reason for getting rich. Find the mistakes of the market and make the right decisions. Next, we wait for the market to correct our mistakes, and your rewards come from here.