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【$888 Reward】Investing and making money is tiring. Is there a way to make money lying down?

Hong Kong stocks have been in a bear market since 2021 and have been around for almost three years now.Starting from the high point,$Hang Seng Index (800000.HK)$By June 7, the close had dropped 38%,$Hang Seng TECH Index (800700.HK)$Down 61%.

“Don't waste every crisis,” Churchill's famous quote is one of the most cited phrases in the market's bearish sentiment this round. butThe more you buy, the more you buy, the more you buy, the lower you buy, investors' patience is being steadily eroded by a sustained bear market that exceeds expectations.

At this point, investors will probably recall a well-known quote by Peter Lynch:Wanting to buy a falling stock on the bottom is like wanting to grab a falling knife.

And the second half of the sentence means more deeply: usually aA more reliable way is to stop moving until the knife hits the ground, dig in, shake it for a while, and then stop moving, then it's not too late to grab the knife.

That is, if you only see “bottom” as a point, then what you are looking for is most likely an “exact error”.The bottom is most likely not a specific point, but a long intervalAt this point, if you just see a fall and replenish, then you're likely to get“Persistent Pain”.

And in the face of Schrödinger's “bottom”,Monthly supply (fixed bid) may be one of the more suitable methods of translation for ordinary investments.

1. Why is it monthly supply?

Monthly supply (fixed bid) is an investment strategy, i.e.Investors buy a certain number of shares for the same amount every period of time (such as weekly, monthly, or quarterly), regardless of whether the market price is high or low at that time.

It sounds like this investment method is a bit “too risky” and makes one doubt that it will yield a good return. But first, let's look back,What are the main reasons why most investors lose money?

According to data compiled at the beginning of 2021 by Jingshun Great Wall Fund, Fortune Fund, and brokerage Schroder Fund United China Securities, an analysis of 4 682 million clients of 129 active equity fund products from 3 companies, 5.65 million transaction records showed that ordinary investors lose when buying a fund. The main reasons for money are:

1. Frequent buying and selling

Overall,The more transactions, the worse the profitability.With the increase in trading frequency, the average annualized return ratio of investors and the percentage of earnings showed a marked decline.

2. Follow the wind

In the face of more intense market volatility, investors tend to take action when choosing to pursue better returns. But when choosing, it is easy to be influenced by market sentiment. In the face of a hot market, investors are more likely to develop a fear of stepping stones, thereby provoking a tailwind chase. In fact, blind tailwind chases and frequent buying and selling coexist,The negative impact of frequent buying and selling on earnings is closely related to bullish pursuits such as.

Most shareholders and investors, always in the middle of the bull market, see that people around them buy stocks and buy funds to make money by entering the market, at which time the cost of holding positions is already high and it is easy to lose money.

At the same time, most people have limited tolerance for losses and volatility. When account losses exceed their capacity, they choose to leave the market, and at this time, when costs are low, it is very likely that it is dark before dawn, and selling is a missed opportunity to rise.

As shown in the figure below, the trading behavior of investors is significantly related to market behavior. So someone said“The bull market is the main cause of losses”.

3. Premature termination of profit and loss

The underlying logic of premature profit-and-loss isInvestors tend to lack reasonable profit targets and risk expectations。 In the face of profits, it is easy to create a “safe pocket” mentality, which leads to early liquidation of profits and losses in the long term; in the face of short-term market turbulence, it is easy to create a feeling of panic. Early losses lead to losses that can be recovered from the market overshoot and return to stability. The figure below shows that more than 60% of investors' returns are concentrated within the positive 10% of the return rate.

And the profitability shows,The longer an investor holds a position, the higher the investor's average return level.Among the foundations with a holding period of more than 10 years, the profitability ratio is more than 98% and the average return is up to 117%.

It is known from historical data,Long-term holding, low-frequency trading, Parson's methodology has earned better returns.In doing so, the monthly strategy has become a good alternative,Because the risk of one-time high purchases is avoided by executing investment plans on a regular, fixed basis, objectively, and, more importantly, the monthly supply can “keep” the investor's hands from the point of view, mitigating the disruption to investor choice, and effectively prolonging the investment cycle.

As shown in the chart below, 21.49% of investors in institutional research adopt monthly supply, but thanks to a disciplinary investment through monthly supply, the monthly supply of customers both profit and average yield are higher than non-monthly supply.

To compare month-to-month and non-month-to-customer by revenue zone, displayThe ratio of monthly losses of more than 10% for monthly customers is significantly lower than for non-monthly customers, helps investors reduce losses to a certain extent by helping the monthly supply.

Second, what kind of food is suitable for monthly supply?

SINCE MONTHLY SUPPLY IS A DIVERSIFIED INVESTMENT, SACRIFICING THE EFFICIENCY OF THE USE OF CAPITAL IN ORDER TO REDUCE VOLATILITY, MONTHLY YIELDS ARE NECESSARILY LESS THAN THOSE OF A LUMP SUM INVESTMENT IN A ROUND OF BULLISH TRANSACTIONS. butIn the event of market falls or sidebar shocks, monthly yields are generally higher.

For example, November 2007 to October 2008 was a very typical bear market, with the Hang Seng count down 55%. If you buy in this range, whether monthly or as a one-time investment, the result is a loss. However, there will be less money in monthly supply and loss.

Source: Tonghua Shun Ifind

Compared with January 2013 to December 2014, the index rose only slightly. During this period, the returns were not particularly good, whether for monthly supply or one-time investments, but the yield on the monthly supply was still very good.

Source: Tonghua Shun Ifind

notablyIt's been a long time in the face of market falls, but not sure when to reverse，Such as the Hong Kong stock market over the past three yearsAnd if you cheat through a one-time purchase, it is likely that it will be difficult to endure the “ongoing pain”. This time of year supply may be a better option, as it can passScattered buying in the lower zone not only reduces the volatility of the position, but also accumulates enough chips for subsequent increases.

According to history, there have been a total of five more prominent bear markets in the past 30 years, with each bear market falling by more than 30% from its previous high. What would be the result if we opened the monthly supply immediately at 20% per round to calculate earnings for the next 1 and 3 years? (ps. those who are afraid of trouble can skip the inference process directly to see the conclusion)

Source: Futubull App

1. On October 21, 1997, the perpetual index fell 21% from the high of August 7, 1997, at which time the monthly supply was opened, the yield was 9% after one year and the yield was 30% after three years.

2. On March 10, 2001, the constant index fell more than 20% from its high point on March 27, 2000, at which time the monthly supply was opened, and the yield was much higher than one-time investments after one year and three years later.

3. On June 11, 2008, the constant index has fallen 23% from the high of October 29, 2007, at which time the monthly supply was opened, the income after one year and the return after three years were positive, and they were far higher than one-time investments.

4. On August 13, 2011, the constant index fell 21% from the high of November 8, 2010. At this time, the monthly supply was opened. The income after one year and the return after three years were positive, and the former was higher than one-time investment.

5. On August 22, 2015, the constant index has fallen by 20% from the high of April 27, 2015. At this time, the monthly supply was opened. The income after one year and the return after three years were positive, and the former was higher than one-time investment.

Overall, the market entered a technical bear market after the last 5 rounds of constant index declines of more than 20%. At this time, the market opted for a month-on-month basis, with an 80% probability of a positive return a year later and an average yield of 7.15%; and a 100% return after three years, a positive return of 19.81%.

In addition, the historical data shows,MONTH-FOR-YEAR RETURNS OUTPERFORM THOSE OF SINGLE PURCHASES, BUT IF THE INVESTMENT CYCLE IS MORE THAN THREE YEARS OLD, A SINGLE PURCHASE IS BETTER, MAINLY BECAUSE THE STOCK MARKET IS BIASED UPWARDS OVER THE LONG TERM, AND THE MONTH-YIELDING DISPERSED INVESTMENT RETURNS ARE NOT THE SAME AS ONE-TIME CONCENTRATED INVESTMENTS.However, the advantage of the monthly supply is that it fluctuates less during the holding period, so it is easier to help ordinary investors make long-term investments through bulls.

Back to the Hong Kong stock bear market in this round,If you believe that the benchmark will continue to bounce back or even break above its all-time high in the coming years, but you are not sure how long it will fall in the short term. At this time you are afraid to miss a rise with its empty positions, or suffer a large drop in net values in a reposition, then choosing a monthly supply may be a better option.The monthly supply allows you to keep a good mood, collect enough code at the bottom, the position is not heavy, but not light, there is money at the top, and the fall continues, a little inexorably.Meanwhile help us through the current bear market and embrace the bull market of the future.

3. How to open monthly supply?

Yongping, an investment master, said that he has two accounts, one long line account and one short line account.Long line accounts are used to invest in value, Shortline accounts are for fun. For ordinary investors, this operation can actually be replicated as well.

NearNihi Futu New ArrivalParent-child account featureAfter opening, you canMonthly Supply of Hong Kong Shares with SubaccountsThe benefit is that it can be used exclusively for long-term investment funds and can be distinguished from everyday stock investment accounts.

*Subsidiary account refers to the client opening a sub-account under a security holder held by Futu. The account holder and the beneficial owner are opened without a female name.

Currently, “Parent-child accounts” are popular with investors in need of funds for the education of their children. For example, investors can customize an account name (such as Hung\'s Education Fund) and use mandatory monthly payments as a way for us to save on education for our children to grow.

Use Parent-Child Accounts to fund education in the long term for growth stocks, invest in stable, high-yield stocks in the short term to reduce volatility. And there is a $388 monthly reward!

As stated in our previous article,The market is unpredictable in the short term, but there are signs of it in the long run.As Hong Kong stocks move into bear markets, many good assets are at a discount, which may be a better way to invest.Since the monthly supply can smooth the cost of buying, the same funds can buy more chips, which can also help us hold on to it for the long term. Especially if we choose high-quality growth stocks that have a clear business model, have a greater decline in the past two years, and return to average earnings per month; or public sector stocks with stable performance and decent dividends, which earn money on a sustained dividend, are likely to yield good investment returns.

Finally, a bowl of chicken soup is given to everyone:

We all yearned for Buffett's wealth, but it was hard for him to have an investment mindset, so he said“My investment system is so simple, why don't others do things like me? Because no one is willing to get rich slowly.”

The monthly supply seems to be just a mechanically regular debit from the account, but more than once in a row inevitably prolongs the long term of the investment, accumulates enough capital, goes through volatile cycles, and finally, a definite return can be achieved. As systemic risks in the market gradually decrease over time, such as wars, economic crises, epidemics, etc. affect the market only in the short term, the market resumes its development trend when the period lasts for 10 years or more. Therefore,A seemingly passive month is actually a “slowly getting rich” investment wisdom.

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What else do you want to add about the monthly supply? Welcome to comment area Comment Discussion~

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