Why are most people more likely to lose money in a bull market?

The operating rules behind financial markets and the principles of behavioral economics involved

1. Most people will eventually lose money. First of all, as long as it is risky investment, no matter in a bull market or a bear market, most people will eventually leave the market with a loss. This is an eternal law and has never changed.

So why is it more dangerous to invest for the first time in a bull market?

Because in a bull market, as the market goes up, everyone makes money. This rapid accumulation of wealth will attract a large number of novices to enter the market.

As an investment novice, I have never bought cryptocurrency before, especially after hearing about the relatively large wealth effect, such as a certain currency multiplying 100 times in a short period of time. I don’t know much about the financial market. I watch my friends around me start to make money, so I enter the market and follow the trend. , ultimate loss is almost inevitable

The timing of entry means that most people only start paying attention to the crypto market in the middle or late stages of the bull market. At this time, the market is already at a relatively high level. No one thinks that the odds of Bitcoin are still high right now? Irrational behavior refers to chasing ups and downs, frequent trading, emotional decisions and other irrational decisions, which will lead to expanded investment losses.

(1) Timing to enter the market Investors always think that they can buy at a low point and sell at a high point and make a big profit from it. Therefore, late entry into the market is an important reason for losses.

(2) Irrational behavior There are many irrational behaviors in investment. For example, everyone knows to buy low and sell high. Buy more when it is cheap, and sell appropriately when it reaches a high level. But in the market, most people do the opposite and actually sell low and buy high.

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