Chapter 58 [Investment Philosophy] - Successful Investors

Source: https://www.facebook.com/100063294665283/posts/692321866220963/

[James Origin and Today] Chapter 58 - [Investment Philosophy] - Why is it so difficult to insist on long-term investment! (08/22/2023)

Our cognition of external things is entirely based on past experiences. This experience and scene will continue to exist in our hearts. Whenever we see highly similar external things, although they are completely different from the past, we will combine them with our inner cognition and think that they are the same. For example, a person who is extremely afraid of dogs will be afraid even if he sees the tamest dog in the world, because he will regard the docile dog on the outside as the same ferocious dog that once bit him inside.

Therefore, everyone's experience of losses in the stock market in the past has caused fear of the market. Even if there is any opportunity in the market, investors will interpret it as the same market that caused their losses in the past, and they will have a great fear of it. This mentality can explain why many investors think of fear and loss when they see the market. Although the market repeatedly presents opportunities, investors just can't see it, because in the investor's heart, the market is scary, just like a dog that has bitten him. So, now I have to reverse my subconscious mind, the market is good, the market will always rise, and I make a lot of money in the market.

Therefore, the gap between external things and our cognition is often very large, but due to lack of knowledge and experience, we cannot see the truth of the facts (things that have not been seen do not exist. Only our subconscious imagination seriously accepts its existence). As long as we are willing to believe that in addition to the world we know in our hearts, there is another world that we don't understand, and we have to imagine that the market will always rise. This is also true, which can be confirmed by looking at the long-term stock market index chart that always rises. Only by believing in the existence of a better world can we create another opportunity.

In the market, many people have held stocks before, but in the end they ended up chasing the highs and killing the lows and losing money (this was caused by wrong targets and lack of knowledge), so their inner understanding is that investment is losing money. Overconfidence leads to short-term operations; but the strange thing is that when investors start operations, when they occasionally make money, they associate the operation with the opportunity to make money. Although they occasionally make profits and occasionally lose, investors in short-term operations are just like gamblers, waiting for the experience and feeling of making money last time. Continuing to operate in the stock market is like occasionally winning money in a casino, and they gamble repeatedly until they lose everything. The scary thing about gambling is that it occasionally allows you to win, and sometimes it's a big win, which we will never forget in our hearts, leading to the inner image of thinking that short-term operations (gambling) will win money, just like gamblers who think gambling will make money and become rich.

When you experience investment losses, or when friends around you say that no one makes money from investing, you will be brainwashed and subconsciously accept it, creating a psychological barrier that the investment will not be successful. It has become quite difficult to change everyone's views on market investment unless investors understand that short-term investment losses in long-term investments are different from gambling losses in short-term speculation. Accepting that although investment indexes sometimes have short-term declines that cause short-term losses of assets, long-term profits can be made and wealth is truly correct.

Only by changing your mentality, being willing to accept another fact, and bravely removing the psychological barrier of investment that caused you to lose money (the dog that bit you) accepts a long-term investment that is completely different from the past to determine a money-making strategy, because new cognition and learning can see more market opportunities, choose the right investment to avoid unnecessary operations, and wait until long-term high profits and high returns, then you will truly understand the market and the correct investment. (The market has not changed, what has changed is our mentality. If the mentality changes, the market will change).

Therefore, we should stably execute the buying index, hold it for a long time without operating, and after a reasonable period of time, let the market help us make money, we will have the scene of another money-making market in our hearts, and the market we see will eventually transform into a money-making market. (I finally understand that most dogs in the world will not bite; just as long-term stable investment makes money, investing in indexes will always make money, the market will always rise, and my investment will always make money).