There is a saying in the investment industry: Those who can buy are apprentices, and those who can sell are masters. In a market that is affected by countless variables and it is impossible to find definite rules in the short term, it is extremely important for investors to establish a profit and loss target. This is what is commonly known as the concept of "stop loss" and "stop profit".

As for stop loss, Buffett’s famous saying is widely circulated: The first rule of investment is to avoid risks as much as possible and preserve the principal; the second is to avoid risks as much as possible and preserve the principal; the third is to firmly remember the first and third rules. Two items. Preserving the principal means preserving the opportunity to start over.

The concept of "stop profit" is particularly important in a bull market, because it is extremely difficult to exercise restraint on profits in a bull market. The optimism generated in a bull market often makes people think that the stock price or the net value of the fund will continue to rise. , (collected by 301 Finance Network) Although rational people know that this phenomenon is impossible to happen, most people are unwilling to sell their funds or when the market is still rising and there is no sign that the rise will stop. Stock.

Setting goals and strictly executing them can protect us from short-term investment. Investors can determine their own "profit stop point" based on their personal "appetite" for profits and their ability to bear risks. and "stop loss point". It should be noted that the establishment of stop profit point cannot be divorced from the reality of the market. We can refer to the actual value-added situation of the market in the past long period of time (you can also refer to the data of more mature markets) to determine a more mature market. Once the profit growth target that may be achieved is reached, the set "falling into safety" procedure can be entered.