Investing Wisdom in Adversity

Experience produces wisdom, and investment wisdom is the accumulation of investment experience and experience of countless people, which can help us cope with various economic and financial environments and enhance our "resilience" and "elasticity" in investment.

Investor Buffett once said: "Only when the tide goes out will you know who is swimming naked." When investing in a downturn in the investment market, such as stock selection, we should not be casual, but "with an eye" for stocks, otherwise it is very likely to lose money Big loss.

Review Your Investments

Economic downturns often expose business and financial problems, which can be a decline in market share, investment failure, or even insolvency, to name a few. When we review our own investments, or consider making an investment, we must examine its fundamental factors. As far as stocks are concerned, the company's performance report and annual report will explain the company's operating environment and financial status, and must be read carefully. We also need to pay more attention to the company's announcements, so that we can know important events about the company as early as possible, such as profit warnings.

Investing is difficult during an economic downturn, but so is business operation. Even blue-chip companies cannot survive alone. In recent months, several local blue-chip companies have issued profit warnings. Investors need to understand the reason for the unsatisfactory performance of the company, whether it is the impact of the general environment, or the poor management of the management; whether it is a short-term factor, or a change in long-term fundamental factors.

"You have to keep your interest!" This traditional wisdom may help you cope with investment adversity. Investment returns come from capital growth and dividends. Under the interest rate hike cycle, corporate stock prices generally face downward pressure. Capital growth seems to be no longer expected, and dividends have become the main support for investment returns. However, due to the economic downturn, corporate profits will naturally be affected, and dividends will be frozen at any time. Dividends may be reduced or even not paid, even traditional dividend stocks such as utility stocks and bank stocks are no exception.

Other traditional investment wisdom, such as diversification and doing what you can (use margin with caution), need to be followed no matter in good times or bad times. After all, investing is a matter of balancing risks and returns. Investing is like a long-distance race. On the way, we will encounter different "scenery", and the journey will not be smooth. When you don't know what to do and are stuck, you may wish to refer to the investment wisdom of the predecessors. I believe it can improve you Investment "resilience" and "resilience".