[Group meeting discussion questions (2-4)]

[Group meeting discussion questions (2-4)] Writing date: August 21, 2018

Question 2: [Can I still buy now?] Teacher, your buying price is relatively low, but our current buying price is higher than yours. If the market falls, you will not lose money, but we will lose money?

answer:

The market is always at a high point. When I bought it several years ago, it was always at the high point. It is no different from the current situation. Just like the current market is still at a high point looking back, but after buying it, you will make a profit in three to five years, and you are not afraid of market fluctuations.

The investment operation is to "buy bravely", "ignore short-term shocks" and "focus on long-term profits". Time will bring you wealth.

Question 3: [Will the teacher tell us to sell when the market bubbles?]

answer:

uncertain!

In the past, we were lucky enough to sell at high points during the dot-com bubble in 2000 and the subprime mortgage crisis in 2007. But I can only say we were lucky. In the future, we cannot guarantee that we will be able to detect bubbles and leave the market in time.

Even if those who bought at the high point in October 2007 did not leave the market, their annualized return rate would still be 8.5%. Therefore, whether you can leave the market in time during the bubble is not as important as everyone thinks in the long-term investment period.

Question 4: [If a retired person invests in the market and the market starts to fall for two years, then he will not be able to support his retirement life. How should we avoid such a problem?]

answer:

I often advise people who retire to have enough liquid assets to support or face an imminent bubble. Therefore, we recommend that your investment assets should be greater than or equal to 25 times your annual expenses.

If the annual expenses are $40,000, the retiree will have to invest a million dollars in the market. When the market starts to fall, the market will be cut in half, plus two years of expenses, the total assets will still be 400,000 dollars, and the annual return will still be 40,000 dollars. It is still enough to support a life with an annual expense of 40,000 U.S. dollars. It is also enough to survive a bubble. When the market starts to bottom out, the assets will double within one or two years, so the total assets will soon return to one million U.S. dollars.