The most important reason why many people do not invest well is that they cannot overcome the herd mentality and the human nature of seeking advantages and avoiding disadvantages. When we buy goods or services, most people's choices are usually the right choice, and the herd mentality can indeed allow us to avoid detours and obtain cheap and high-quality goods and services.
But when it comes to investing, herd mentality doesn't apply at all. In the investment market, the pursuit of advantages and disadvantages in human nature will be infinitely magnified. Most people like to chase up, are afraid of **, love hot products, and hate unpopular products. Human nature keeps telling us that it's safer to buy what everyone buys.
Unfortunately, this approach simply does not work in the investment market. It is a place where people compete with each other. When everyone rushes to buy a certain asset, it means that its ** is overvalued, and those assets that no one cares about must be cheap and undervalued. Because of this, many people find themselves "falling as soon as they buy and rising as soon as they sell", feeling that "the market is always against them", which is the consequence of investing with a herd mentality.
* In fact, it is a place for asset redistribution. There is so much money in the market, it is impossible for the majority to make the money of the minority, because they cannot afford it, it must be the few who make the money of the majority. If your investment behavior is driven by human nature, then you must be the "majority" who is harvested by the "few".
Therefore, to make investment, it is not enough to have knowledge and methods, but also to have an "anti-human" thinking and dare to "go in the opposite direction with the choices of most people". Buy where no one cares, and sell when people are buzzing.