To be honest, I have been increasingly advocating for index investing lately.

In the current situation where individual stock performance is becoming increasingly difficult to manage, investing in indices has become a good alternative.

My previous idea was to buy stocks in a bull market and buy funds in a bear market.

The main reason is that in a bear market, buying funds can be used to average down the cost, making it easy to make money.

In a bull market, there are more opportunities in stocks, and the returns from buying funds are far less than those from individual stocks.

Now, my idea has been slightly upgraded: invest in broad-based index funds in a bear market and invest in leading sector stocks in a bull market.

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In a bear market, avoid the selection of individual stocks and choose index ETFs for investment.

The reason for this idea is that during several bear market downturns, I found that the risk of individual stocks is far greater than that of broad-based indices.

Of course, broad-based indices are not without risk.

However, compared to the continuous decline of sector indices, the decline in broad-based indices is obviously more limited, and the average cost can be averaged down through additional positions.

To be candid, I have been growing more and more in favor of index investing recently.

As the individual stock market becomes increasingly challenging to navigate, investing in indices has turned out to be a viable alternative.

My former belief was to purchase stocks during a bull market and funds during a bear market.

This was primarily because, in a bear market, buying into funds could allow for averaging down the cost, making it simpler to earn profits.

When the bull market arrives, there are more opportunities in stocks, and the returns from investing in funds are significantly less than those from individual stocks.

My current perspective has evolved slightly: invest in broad index funds during a bear market and in leading sector stocks during a bull market.

Avoid the selection of individual stocks in a bear market and opt for index ETFs as an investment.

This shift in thinking came about after observing several bear market declines, where I realized that the risks associated with individual stocks are much greater than those of broad index funds.

Of course, broad index funds are not devoid of risks.

However, when compared to the relentless declines of sector-specific indices, the downward trajectory of broad index funds is noticeably more contained, and the average cost can be reduced through additional investments.That is to say, under the premise of controllable positions, the risk of the index is controllable.

If you start with a full position, even index investment also has a great risk of loss.

Of course, the index does not have the risk of delisting, and it will not eventually return to zero.

If the cycle is long enough, the index still has the opportunity to return to the historical high.

The individual stock market in the bear market is obviously difficult to grasp.

Although there are also many stocks that double in the bear market, and even 10 times stocks, but if calculated by proportion, it is rare.

What's more, some people say they have participated, but they are just passing by, and it is not common to leave with double profits.

Some people will say that buying the index in the bear market is obviously a loss, and buying stocks in the bear market still has the opportunity to make money.

This sentence seems to make sense.

The so-called bear market is that the index falls by 10-20%, and it seems that buying the index is more likely to lose money.In a bear market, 10-20% of stocks may still rise, offering a glimmer of hope.

However, the reality is that most retail investors tend to buy stocks that fall more severely than the index, or even by half.

That is to say, in a bear market, active retail investors not only have a higher probability of losing money, but the amount of loss is also significant.

Even in a controlled position, even the bear market index has the opportunity to rebound.

If there is really no opportunity, the index in the bear market continues to fall, once it turns to a bull market, the index can also turn danger into safety and finally make a profit.

But even if the bear market turns to a bull market, individual stocks may not be able to turn danger into safety.

Those stocks that only fall to 10-20%, as well as those stocks with poor performance and on the verge of delisting, have nothing to do with the bull market.

So, what you see in a bear market is the opportunity of individual stocks, but the risk of individual stocks is actually the greatest.

It is like the main force setting up a chess game, asking retail investors to get involved.

There are definitely retail investors who make money in a bear market, but the proportion is really very small, and more are those who are hurt and unable to turn over.If ordinary retail investors really want to play in a bear market, they might as well just play with the index, at least when it falls, the losses are smaller, and when it comes to stopping losses, it's more convenient, so as not to incur particularly large losses.

Although the index market is not as good as the individual stock market, it is easier to control.

The situation in a bull market is just the opposite of a bear market.

A bull market is mainly about the rise of all stocks.

Many people say that the world has changed, and even if junk stocks encounter a bull market, they will not be speculated on.

I have a different attitude on this point.

I think that junk stocks may not survive until the bull market comes, and those who can survive in a bear market must be "bottom-fishing" by funds.

So after the bull market comes, these stocks will not be willing to be lonely and will not be speculated on.

Without the rise of all stocks, it is not a real bull market, and the so-called structural bull market is nothing more than a rhetoric of insufficient funds and local speculation.In a bull market, it is not impossible to buy index funds.

Buying index funds is also a very hassle-free and winning investment method.

However, the return on investment from buying index funds is likely to be lower than that of individual stocks.

In a bull market, the increase in weighted stocks is relatively limited, and the remaining stocks generally rise more than the index after excluding the weight.

The probability of losing money by speculating on individual stocks in a bull market is actually very low.

Those who ultimately fail to outperform the index generally have the problem of frequently changing stocks, chasing rises and cutting losses.

They often consume a lot of profits during the bull market's shock period and washing period, thus earning less.

There are also losses in a bull market.

If you buy individual stocks and step on a mine, buy loss-making stocks, or some counterfeit stocks, it is also possible to suffer huge losses.

Therefore, if you want to outperform the index by buying stocks in a bull market, you must moderately diversify your positions.Not only that, but the following points also need to be achieved.

Firstly, the overall position must be high.

The key to making more or less money in a bull market actually lies in the level of the position.

As long as the position is in place, you can make money even by lying in a bull market.

Because many people have experienced a bear market, they dare not increase their positions in a bull market.

They are cautious and careful in the bull market, doing the market carefully.

As a result, after a round of bull market, the position is controlled within 50%, and the more it rises, the more they dare not to add positions.

Investing in the index will be more courageous in terms of position, after all, the index fluctuation rate is small, and the error tolerance is higher.

Secondly, the frequency of transactions should be low.

Whether it is a bull market or a bear market, the frequency of transactions should be reduced.The reason is actually quite simple, because a bull market is not about making money through busy work, but through trends.

This is akin to 99% of people, whose gains from the last bull market were less than those who simply held onto Moutai from start to finish.

The main trend, leading stocks, and the overall trend create the truly great bull stocks.

Compared to chasing daily limit-up stocks, this method is both simple and more worry-free.

Mainly, it is also more convenient to operate, suitable for ordinary retail investors, rather than having them keep busy in vain.

Short-term trading is not impossible to make money, but it is not suitable for retail investors, let alone that there are now quantitative trades everywhere, how can retail investors stand out?

Third, know when to take profits.

The individual stocks in a bull market actually have much greater volatility risks than the index.

The index may have reached a peak, and a large bearish candlestick may come down with just a 2% drop, but individual stocks may directly hit a limit-down.

For those with slow reaction times, they could lose 20-30% in just a few days.The reason why many retail investors do not make money in a bull market is that they ultimately fail to successfully sell at the peak and directly step into a bear market. Moreover, they are not aware of it in the early stage of the bear market, and as a result, they directly endure a bear market. That is certainly the small money earned, and in the end, it is lost again. This phenomenon is very common, and it is actually due to the unwillingness to take profits when the situation is good, always hoping to sell at the highest point.

The index and individual stocks are inherently interdependent. However, for retail investors, the investment methods for the index and individual stocks are completely different. The former is more suitable for retail investors who do not have trading time, do not understand the stock market very well, but are patient, can value, and can manage their positions well. The latter is more suitable for experienced stock market investors who have a certain experience in stock trading and can identify the bull and bear market.

There is no absolute right or wrong way to invest, only the ability to find the right investment method and strategy for oneself.Once you figure out this issue, perhaps you will know exactly what to do in the market.