How to Invest in Stocks with a Good Mindset? I have been contemplating this question for over 20 years. Ultimately, I have refined and summarized the following nine points:

1. Stock investment income is only a part of the total income.

For example, in addition to stock investment, there are more stable sources of income such as work, business, rent, and copyright. That is, stock income is not the only source of income.

2. In addition to stocks, have bonds, funds, deposits, real estate, and other assets.

In addition to high-risk investments, there should also be defensive financial management, including fixed-income products, deposits, government bonds, etc. It is necessary to have a variety of types of assets. Only in this way can we achieve both offensive and defensive capabilities. If there is only offense without defense, it is difficult to have a good mindset.

Advertisement

3. Manage funds and stock portfolios well, and control risks.

The funds invested in the stock market also need to be risk-controlled, and investment plans should be made to prevent problems before they arise. The most commonly used methods are stock portfolios and fund management, maximizing returns under controllable risks.

4. Use long-term idle money to trade stocks.

Investing in stocks requires the use of idle money that will not be needed for 5 or 10 years, and never borrow money or use leverage. In this way, even if you make money, your blood pressure will rise.

5. Set realistic or lower investment goals or plans.Do not set your investment goals to double your returns every year, as this will only lead to taking unnecessary risks and making significant mistakes that can cause a mental breakdown. It is more realistic to set your investment goals at an annualized return of 10% and plan for the harvest period to be 5 or 10 years later, which will make it easier to maintain a good mindset.

6. Only invest in what you understand, and avoid short-term speculation.

You know that an item is only worth a penny, and you see it has risen from a penny to a dollar, with the potential to go above 1.10 dollars. You immediately buy it at a dollar, just to sell it to the next fool at 1.10 dollars. You will surely pray for that fool to appear at 1.10 dollars. Because you have no way out, how can you have a good mindset when doing such things?

Or you buy something you don't even know how much it's worth, just because you see many people making money by buying it. When you get your hands on it and find the price falling, you start to panic. Short-term speculation is like walking on a tightrope; how can you have a good mindset?

Buying things that are worth their price and things you understand will bring peace of mind. If you spend 50 cents on something worth a dollar, and a month later its price is 70 cents, would you rush to sell it? Would you be so nervous that you can't sleep?

7. Do not frequently pay attention to the market.

The human brain is very prone to addiction, and constantly watching the market can lead to market addiction. Once addicted, you will waste a lot of time watching the market, which will affect your investment mindset. Only by staying away from the market can one's rationality return more easily. The various temptations on the market make it easy for us to make wrong decisions.

8. Have a high level of understanding of stock investment.

As long as you have a deep understanding of anything, you will naturally have a good mindset. Many people become very anxious and even mentally broken after being trapped. They never thought about the possibility of losing money before buying. This shows that they have a low understanding of investment. In the end, the above seven points are all rational decisions made after improving investment cognition.9 A Rich Extracurricular Life

The essence lies beyond the poetry. Daily life and social and business practices and reflections outside of stock market investment have a significant impact on our stock investments. The purpose of our investment is to live a better life. Never let investment mess up your life, otherwise the investment loses its original meaning.