It is more important to invest not to gain high returns, but not to lose money. This conservative investment style can often go further!
How to avoid losing money is not necessarily a low position, but an effort to improve certainty.
There are many ways to improve the certainty of investment: one is to keep full positions, because the stock market will rise forever after the time axis is lengthened, and the decline and fluctuation are short-term performance.
Another method is to choose the right time, when the market is low, when the market is high, when the market is high. Then you have to understand what is high and what is low. There are two ways to understand the high and low stock prices. One is to study deeply, to know the company that holds shares well, to give anchors, and then to know the high and low stock prices. Another decentralized and non-intensive method is to understand the historical change of the average P/E ratio of the stock market, using the low P/E ratio investment method, low P/E ratio, high P/E ratio and low P/E ratio positions.
It's only a joke to throw high and suck low in the long run, but some people think they can do it. I congratulate him! But I never sell high and draw low. I just buy low and hold it. Even when I buy low, I give up the timing altogether. When I have money, I buy when I think it's cheaper. In the short run, it's easy to make mistakes. For example, my wife says I'm a stock killer, but in the long run, no one around me earns more than I do (online of course).
As for holding cash, I always have cash in hand, but not much. There used to be 5%-10%, but now the amount of capital is only 1%-3%. Why do you keep cash? I will always give me enough liquidity to prepare for uncertainty in life and to cope with occasional opportunities in the stock market. Why do you keep so little? Because all these years of big cycles see my stock from cheap to expensive, a cycle has not been completed.
I may hold more cash in the future, but not much, such as more than 30%, because I think the stock market is going up in the long run. Even if a stock is expensive, there are other inexpensive ones. I will always have "assets" instead of cash. Cash can't bring cash flow, so it's not an asset. Cash is just a division of forces, used for surprise. Excessive cash holdings are essentially speculative.
In the future, I may be scattered, because when I meet a good company that understands, it's cheap and reliable, but it's hard to meet. In the future, I may not find a company that is cheap and understandable like today.
Regarding leverage, I have no objection to leveraging. For example, most of the companies we buy have liabilities, which are leverage. Since you allow the company you own to have leverage, why don't you have appropriate leverage? I have always regarded myself as a company, salary income and dividend income are my operating cash flow, I will be in debt, but I will absolutely guarantee that cash flow is not wrong, such as salary income cash flow is much larger than the principal and interest that I need to pay back in debt. When choosing liabilities, I will choose the long-term equivalent principal-interest leverage, rather than the short-term liabilities due to repay principal. Investing in short-term liabilities with repayments due is to invest time-bound funds in the stock market. That's gambling.
As for warehousing adjustment, I said before that I was a silly cow who only ate Southern sloping grass. I would not envy other nomads to find more lush grass, but I just stayed on the south slope where I thought there would be plenty of days to wait for the grass to germinate, waiting for the plump and lush. It's not easy to find a stock that you can understand more by life. It's not easy to buy a cheap stock by luck. So I seldom adjust my position. I hope I can hold them all the time and never sell them. Of course, it's just hope.
Private-equity investors who manage money on behalf of their classes will be more willing to adopt the investment method of holding large amounts of cash, such as holding close to or more than 50% of the cash. They don't invest well. They run businesses. They often understand that it is not easy to make money in the stock market, so they consciously do not pursue high returns and are satisfied with very low returns because they want to make money for specific customers, so that they can earn management fees steadily.
