Nvidia plummeted its investment losses, and its mentality was broken! How can investing in US stocks establish a correct investment mentality?

We often hear people say that successful investment is 60% of stock trading mentality +30% technology +10% luck. It can be seen that the investment mentality plays an important role in the investment process, and many investment experts have lost everything due to the investment mentality. Therefore, how to establish a scientific investment mentality is extremely important.

Well, today, let's talk about the investment mentality in investing in US stocks.

Everything has a price. Whether you're interested in a new car or are planning to buy a bigger house, they all have a price. You need to pay a sum of money to get something like this, and you also need to spend on maintenance after getting it. This is the price. The same goes for investment. The price and commission of a stock are its costs; fluctuations in stock prices are its costs.

Let's say you already anticipated Nvidia's bright future ten years ago and weighed on your entire net worth. Then you should be a pretty rich person today. Nvidia has grown more than a hundred times over the past ten years.

However, in the process, Nvidia's stock price did not always go smoothly. During this period, he experienced two declines of more than 80% and three times a drop of more than 50%.

In that case, how do you convince yourself to hold on to it? How should you deal with your family when your assets are reduced by 80%?

Of course this is a very extreme example, but as long as you invest in the stock market, fluctuations are inevitable.

For example, many people are very optimistic about technology stocks today. Of course 23 years ago, ah, people had the same opinion. After the collapse of the Internet bubble in 2000, the Nasdaq 100 index, represented by technology stocks, fell by more than 80% at its peak, and then it took almost 16 years to reach a new high.

Investing is exciting because it creates wealth, but it comes at a cost, and all investors must experience fluctuations. You have to look at it as the price you pay for a better future.

Of course, I'm sure some young friends will say, “Hey, I have the ability to avoid falling and then seize the rise.

OK, we'll talk about this topic later. Please keep reading. There is a very interesting phenomenon.

Assuming you get a year-end bonus of 100,000 yuan at the company, of course this is very happy. However, when you learn that your colleague, who is very unattractive on weekdays, Xiao Li actually received more bonuses than you, I don't think you were happy at this time. Capitalism is good at doing two things: the first one is called creating wealth. The second one is called creating jealousy. People love to compete, and people love to prove they're right.

In a positive sense, this makes it easier to generate a kind of motivation and work more efficiently.

However, in a negative sense, people always feel dissatisfied. No matter how much money you earn, there are always people who earn more wealth than you and are jealous of these two things.

Currently, communication on this internet social media has been infinitely amplified. We often see something, such as how much money intraday traders make in a day, and inadvertently see who who recommended another bullish stock, which increased several times within a few days. Most importantly, Lao Wang next door didn't understand anything; he actually made millions by investing in Bitcoin. How can I endure this? If not, I want it too.

Therefore, in the financial market, there is a term called phobia of missing out; it refers to this kind of mentality.

This state of mind makes people do stupid things. We're going to hear a lot of stories about this. For example, the biggest names in the investment industry gambled on the market, eventually bursting out their positions, or even committing suicide; a high-ranking official of a certain and certain carried out insider trading, and as a result, lost fame and even went to jail, etc. Of course, they probably didn't just do it for money; they probably wanted to prove Haikou that they boasted in front of others. Anyway, they hope that the competitive mentality of looking good will make people lose their minds.

So keep in mind that you need to have a mindset at some point during the investment process — stop at least.

If you're not satisfied, you'll never be able to live a free lifestyle.

Sometimes we see people doing very exaggerated things. For example, spending a lot of money on luxury goods, famous cars, watches, and mansions, all kinds of flaunting.

However, there are some people who have lived their whole lives in an old and dilapidated village, yet they are rich and hostile to the country.

We need to understand that people come from different backgrounds, their childhood, their experiences, their education, etc., which determine their different worldviews and values. Something crazy for you may be a very reasonable thing for others.

For example, the lowest-income households in the US may spend more than 400 dollars to buy lottery tickets, which is more than four times higher than the average value of the highest-income cohort buying lottery tickets. Also, more than one-third of Americans are unable to provide a three-dollar emergency fund, which sounds incredible. But standing in their background, for them, buying a lottery ticket is the way, and probably the only way, to make their dreams come true.

What I'm saying is that when you notice that someone's behavior is crazy, you need to think about the problem from his perspective; maybe what he did is completely unworthy or completely unsuitable for you to emulate.

When it comes to investing, the same goes; you need to be very clear about what your investment goals are.

Maybe some people's investment ideas just don't suit you at all. Perhaps stocks or portfolios recommended by others aren't worth emulating at all. If you're still young, you should focus on how to quickly accumulate capital rather than how to preserve your wealth. Understanding the differences between people makes it easier for us to discern and reject investments that are beyond our means. But you can still listen to some good investment advice from your seniors. For example, when it comes to choosing the right investment platform.

So how do we choose the right investment platform? There are thousands of compliant stock exchanges around the world that provide US stock trading services to users around the world, such as Yingtou Securities, Carson Wealth Management, etc., but for investors in many regions, it is not very convenient to deposit and withdraw US stocks and Hong Kong stocks. Fortunately, in recent years, some new platforms have been created that can deposit digital currencies such as USDT to trade US stocks, such as BiyaPay, which can help solve this problem. Investors can check BiyaPay's official website, and you'll find that BiyaPay can not only deposit USDT to trade US stocks and Hong Kong stocks, but also provide services for depositing USDT and withdrawing US dollars and Hong Kong dollars to bank accounts. In this way, Biyapay can also provide withdrawal and deposit services for other brokerage firms.

What follows is the final point of investment mentality.

What characteristics do the Great Depression of the 1930s, the World War II financial crisis, and the recent COVID-19 pandemic have in common?

Obviously, they are all events that have had a huge impact on our society and financial markets, and are almost unpredictable. This is the so-called black swan incident.

Many black swan events will change the course of our human society, and we can find many reasons to explain them later. But until something happens, no matter how you calculate it, you can't know. The biggest risk is actually something that no one has ever thought of or mentioned, because it's impossible for anyone to know.

In 1988, Black Monday in the US stock market fell by nearly a quarter of its market capitalization in one day. The stock market crashed in 2020, and within a month, the stock market evaporated one-third of its market value.

So please think about it, in this case, would you sell it? Still believing that this storm will pass soon; would you dare to invest more when it falls? Or do you believe in your ability to get out as soon as a disaster strikes and get in before a rebound is imminent?

Avoiding a fall in the market means there's a good chance you'll miss a rise. According to statistics, 78% of the best days in the US stock market occurred in the first two months of a bear market or bull market. If you miss the 10 best days in the market in the past 30 years, your return on investment will be halved, and missing the best 30 days will reduce your return by an astonishing 83%.

No one knows what will happen in the future, and the easiest and best way to avoid missing out on these best days is to hold on.

What I want to talk about in this example is, first of all, we must acknowledge that we cannot anticipate extreme market conditions, don't expect to be able to retreat completely before a disaster hits, and no one can achieve perfect profit and avoid harm.

Therefore, it is most important to have an optimistic mindset and be mentally and financially prepared to face disasters at any time.

For example, let me show you some data, such as the US government's demand for huge debt falling, the interest rate curve being inverted, etc. Then tell you that these factors will cause the stock market to collapse at any time over the next period of time. You may think it makes sense, and you may even have some negative opinions about this.

In turn, I'll show you some other data, such as human life expectancy is increasing, green energy is getting cheaper, AI is becoming more and more widely used, etc. I want you to see that our world continues to improve. Seeing this information, you might be hopeful about the future.

In financial markets, pessimistic people look smarter, while optimistic people seem relatively naive. Why is that?

Because profits always accumulate very slowly, and losses always come too suddenly and too violently. Wealth usually comes to naught overnight after years, which is very painful. People are afraid of the asymmetry between loss and gain. In the course of human evolution, an instinct gradually developed, and the priority of avoiding loss is far higher than obtaining benefits.

This instinct makes pessimistic stories even more engaging. Human instincts are more interested in pessimistic stories. Therefore, when we face difficulties and difficulties, we adjust some of our risk appetite appropriately. Perhaps with just a little bit of optimism, an optimistic attitude can keep us a little sober in the midst of a disaster. Actually, the world is much better than you think.

If you're unwilling to pay the price of volatility, you won't become jealous in the market. It's ultimately the worst of these: never risk losing what you have and need to pursue what you don't need. Other people's opinions and actions may not be worth emulating. Don't try to meet a disaster, but prepare for mental and financial hardship so that you can survive the disaster, and in the end, only optimistic people can have the last laugh.