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With the recent adjustments, many retail investors who had just managed to recoup some losses in the previous few months have now given it all back.

Watching the small-cap stocks plummet while the large-cap stocks remain unmoved, many have fallen into deep contemplation.

It's understandable why retail investors don't buy large-cap stocks.

On one hand, large-cap stocks are at a relatively high position, seemingly in need of adjustment.

On the other hand, when large-cap stocks rise, the movement is also relatively slow, and the profit effect is not very good.

Retail investors all yearn to make money through buying stocks, preferably a lot of money, rather than indices with smaller volatility and lower risk.

No one invests with the aim of reducing risk, but rather for the return.

From a certain perspective, stocks with low returns are not even as good as depositing in a bank.

This idea seems to be correct, but it goes against the essence of the stock market.

ETF investment may be the last pure land for retail investors, which can reduce risk and ensure returns.Firstly, there is no market that only rises and never falls, so risk is very important.

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It is often said that indices are like "chicken ribs," with little gain when they rise and little loss when they fall, not losing much money, but making money is also very difficult.

Although this is true, it cannot deny the importance of risk to the market.

It can be said that in a market with short bull and long bear periods, risk is far more important than returns.

Most of the time, the market is in a state of decline, and the decline of the index is relatively controllable, but individual stocks are completely different.

It seems that investing in indices does not make money, but in fact, it effectively controls risks and also grasps opportunities.

Perhaps, the opportunity to get rich quickly is reduced, but the possibility of gradually getting rich is increased.

Secondly, the stock selection ability of retail investors is far worse than that of indices.

Retail investors always think that their stock selection is much better than that of institutions and choosing indices.

This misunderstanding is very fatal.This is a blatant provocation against professional institutions, which consider the research reports and analyses of others to be of little value.

In the A-share market with information asymmetry, retail investors are inherently at a disadvantage when it comes to stock selection.

The probability of stepping on a mine is naturally higher than that of professional investment institutions and the index.

The number of delisted individual stocks is increasing, but there is no such case with the index.

Many smart investors now check whether the listed company is included in the industry index before buying stocks.

This is to determine whether the safety factor of the stock is high enough and whether its position in the industry is solid enough.

Third, the long-term winning rate of the index layout is much higher than that of individual stocks.

From the results, the proportion of stocks that can ultimately outperform the index is a small part.

This is because that small part has soared and has become the weight of the index.

Moreover, ETFs also have a characteristic, which is to continuously remove the garbage from the index and add new high-quality companies to the index.This means that over time, the components of the index will become better and better, and the trash will become less and less.

From a long-term perspective, quality companies are definitely able to outperform their competitors in other industries, which is also why the long-term trend of index ETFs is definitely better than the weighted average of most stocks.

It is understandable for retail investors to seek their own way out in the stock market, but most of the ways out are definitely not suitable for ordinary retail investors.

The reason is also very simple, if a large number of retail investors can make money through a certain method, then the main force will deliberately target this method.

In simple terms, the market game will not have a way to win with a high probability.

Especially for the majority of retail investor groups, it must be more losses than gains, and there will be no change.

The only two things that the main capital cannot target are:

The first is long-term investment.

As long as your trading frequency is low, no capital can cut your leek.

(Note: The term "韭菜" is a colloquial term in Chinese financial slang, often used to describe small retail investors who are often at a disadvantage and can be "harvested" or exploited by larger, more informed investors. The translation "cut your leek" is a literal translation, but the term does not have a direct equivalent in English financial slang.)The reason is simple: capital cannot wait for you.

If you only make a transaction every few months, or even years, how could the capital possibly cater specially to your trading behavior?

The essence of all long-term investments is to compete with the listed companies.

If the listed company is developing well, it naturally makes money.

If the listed company is not doing well, holding for a longer time is useless, and it will only increase your losses in the end.

Long-term investment does not need to play against capital, just play against the prospects of the listed company.

The second type is index investment.

Index investment, also known as ETF, can avoid being sheared by the main capital.

Perhaps some people will also say that the main capital can also manipulate the index, and doing ETF will also lose money.

At first glance, this seems to be correct, but in fact, there is a fundamental logical error.Let's take the Shanghai Stock Exchange Index as an example.

What kind of main force capital can so easily manipulate the index, and then deliberately target a few small retail investors?

The capital that can move the index is definitely not of an ordinary level.

This level of capital would not care about retail investors at all, but focus on the trend of the index and engage in mutual game with other large capital.

To put it bluntly, the capital that can participate in the index game would not look down on the small amounts of money in the pockets of retail investors.

ETFs can very well avoid being targeted by the market, truly achieve the same frequency with the market, and make money by relying on the judgment of the market and the execution of strategies.

The cruelty of the registration system, I believe many retail investors have already seen it.

When retail investors are still gambling on restructuring and looking for shell resources, the main force has already changed its trading style.

With the increasing number of listed companies, the living space left for retail investors is actually getting smaller and smaller.Due to the inherent inequality of information, retail investors are always at a disadvantage in the capital market.

Would you really dare to invest in those obscure listed companies whose business you don't even know?

If investing really became a huge gamble, and we could understand a 100% profitable method just by a few codes and a few K-lines, the entire market would have collapsed long ago.

So many well-known and unknown investment institutions have returned from the A-share market with their feathers clipped, let alone ordinary retail investors.

When the market does not leave much room for survival, it is necessary to make good use of the roads that can be seen at present.

Indeed, in the past few years of the bear market, even investors who bought index funds did not make much money, and there were also many who lost money.

But compared with those retail investors who are blindly tossing and turning, the overall proportion of making money is higher.

Especially when the market begins to rectify and clean up junk stocks, the value of index investment is obviously on a higher level.

Although it has been studying stocks for more than ten or twenty years, it has only been three years since studying indices.

The way to play with indices is indeed very different from that of stocks, and it can be said that the difficulty is not small.But there is no way out, as the times will phase out some old experiences and methods, and we can only keep pace with the times.

The law of the jungle, survival of the fittest, is the truest form of the capital market.