$Dow Jones Industrial Average (.DJI.US)$ Companies with stro...
$Dow Jones Industrial Average (.DJI.US)$ Companies with strong profitability themselves can understand the risk of fragmentation, or because the company's industry enters a cycle of declining growth rates. At this time, they need to prepare for the company's cross-industry transformation to lead investment in other emerging industries. Their investment claims are stable growth or assist the parent company to carry out industry transformation or business expansion. The brokerage is simply to profit in the market. The speculative nature is much higher than the previous situation. The rest are retail shareholders, which have almost no advantage over retail shareholders of asset companies and brokerage retail shareholders. Obtained through mass media, and most of the information spread out is subjective, so it is not very indicative. If you really need to use information and policy fluctuations as an investment reference basis, instead of following social media opinions, it is better to study the trends of brokerage firms and asset companies. However, you need to grasp the timing of leaving the market, not be greedy and consistent with the brokers' profit goals, set your own profit goals, and these goals are slightly lower than those of brokerage firms. This standard can be estimated by referring to profit reports published every year to estimate the percentage of profit required in a year. , Completing this percentage is a basic requirement. Furthermore, the capital is divided into several parts. Some maintain continuous and stable profits with investment companies, some follow the brokers' speculative plans, and the last small portion needs to be taken out to focus on companies that do not own or account for a small share of brokerage firms or asset companies. These companies are purer and more dependent on breakthrough developments in the industry. Once a breakthrough in industry technology or business model is achieved, the valuation of such companies will skyrocket.
This strategy of diversifying capital allocation also helps control risk. Let's take a closer look:
1. Diversification and industry transformation:
Profitability companies with strong growth potential in mature industries tend to choose to invest in emerging industries to spread risk and prepare for future business expansion. These companies usually choose emerging industries that can help the parent company transform or expand its business in order to achieve long-term stable growth. The advantage of this type of investment strategy is that it can use existing resources to enter new markets and achieve diversified operations.
Profitability companies with strong growth potential in mature industries tend to choose to invest in emerging industries to spread risk and prepare for future business expansion. These companies usually choose emerging industries that can help the parent company transform or expand its business in order to achieve long-term stable growth. The advantage of this type of investment strategy is that it can use existing resources to enter new markets and achieve diversified operations.
2. The speculative nature of brokerage firms and the disadvantages of retail investors:
Since brokerage firms have more information channels and market resources, their investment behavior is usually more speculative in favor of short-term profits. Retail investors are at a disadvantage in terms of information and resources, and rely on mass media information, and most of this information has probably been fully used by brokerage firms and large capital institutions. Therefore, you proposed a practical strategy: follow brokers' movements and follow up on them. In this way, it is possible to maintain consistency with brokers' operations as much as possible and reduce the adverse effects of information delays.
Since brokerage firms have more information channels and market resources, their investment behavior is usually more speculative in favor of short-term profits. Retail investors are at a disadvantage in terms of information and resources, and rely on mass media information, and most of this information has probably been fully used by brokerage firms and large capital institutions. Therefore, you proposed a practical strategy: follow brokers' movements and follow up on them. In this way, it is possible to maintain consistency with brokers' operations as much as possible and reduce the adverse effects of information delays.
3. Profit target and exit timing:
When retail investors follow up, if they pursue profit targets that are in sync with brokerage firms, they may miss out on opportunities to leave the market when the risk is high. The reasonable approach is to set a profit target slightly lower than that of a brokerage firm. For example, you can judge its profit target by referring to the annual report issued by the asset company or brokerage firm. Leave the market in a timely manner after reaching the target and not being greedy for excess profits, so you can make steady profits when the risk is manageable.
When retail investors follow up, if they pursue profit targets that are in sync with brokerage firms, they may miss out on opportunities to leave the market when the risk is high. The reasonable approach is to set a profit target slightly lower than that of a brokerage firm. For example, you can judge its profit target by referring to the annual report issued by the asset company or brokerage firm. Leave the market in a timely manner after reaching the target and not being greedy for excess profits, so you can make steady profits when the risk is manageable.
4. Percentage of funds allocated:
The method you mentioned to spread the funds is quite reasonable. Part of the capital is invested in asset companies with long-term stable growth potential. This type of investment is a core asset and aims to achieve stable value addition. The other part invests in brokerage projects with short-term profit potential. This part requires keen observation and quick response. Finally, allocate a small amount of capital to emerging companies — although risky, these companies can bring high returns if they break through the industry.
The method you mentioned to spread the funds is quite reasonable. Part of the capital is invested in asset companies with long-term stable growth potential. This type of investment is a core asset and aims to achieve stable value addition. The other part invests in brokerage projects with short-term profit potential. This part requires keen observation and quick response. Finally, allocate a small amount of capital to emerging companies — although risky, these companies can bring high returns if they break through the industry.
The advantage of this capital allocation strategy is that it can not only obtain stable returns, but also participate in speculative investments on the premise of controlling risk, and maintain a certain risk exposure to pursue high returns. As long as the pre-set profit and stop-loss targets are strictly followed during execution, this strategy should be relatively robust.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
