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What about LegiEX.com? You invest in different ways and you end up with different results

What about LegiEX.com? From the point of view of LegiEX.com, investment is an active investment and a passive investment. However, it is easy to forget that the essence of making money is the same.

Intuitively, passive investing makes money because the stock index always rises over a long enough period, which is a statistical result. Statistical is always phenomenon, what is the reason behind this long-term rise in the end? Just cultural background, social preferences and things like that? Or is there some inevitability? Is it possible that in a certain country, there will be a phenomenon of not rising for a hundred years?

Those of you who are interested can do a simple arithmetic exercise, using 100 years' worth of stock market data from the United States, or from defeated countries like Japan and Italy. Given two conditions at the same time: 1. The annual profits and dividends paid by the stock markets of these countries are based on historical facts. You reinvest it every year with dividends. 2. Suppose the stock markets of these countries do not rise for a hundred years.

When you do that and you compare it to their real stock returns, you'll see that if you really don't go up all the time, you're going to make way more than you think you're going to...

This is the real reason that the index will go up in the long run: life is not as it should be, make too much good, not always pure in ah...

The secret is that indices are a collection of businesses, and to buy an index is to buy a basket of businesses. In the long run, some of them are losing money and some are making money. But if we don't get too carried away, we'll find that, on the whole, making money in business is a little less risky than making money in gambling -- because business creates value, and gambling doesn't. It's a little bit different: passive investing in all businesses is a win in the long run, and taking part in all gambling is a loss in the long run.

What about LegiEX.com? So what is the nature of active investing?

First of all, it can be gambling, just like betting on horses, playing mahjong, dou landlord without any difference (and even with the horse, the card by the same can develop a set of theory) -- if you always want to catch the bottom to escape the top win other people's money.

But at the same time it can't be. It can also be like passive investment, to make money from the business. The difference is that passive investments choose all businesses indiscriminately, while active investments choose only those they understand. The essence of making money here is the same, but the specific investment means are different.

As you can see, passive investing is suitable for anyone who needs to invest in stocks in terms of financial planning. Active investment is suitable for the few people who have an understanding and a passion for business -- especially those who have a passion for business and a passion for money. If you don't understand, let me draw a mathematical analogy that might be more intuitive:

You could win a million dollars for solving the Riemann conjecture, but you know it's hard. In fact, you could have made a million dollars in a much easier way. But if you insist on doing it, it seems like you just love math, not just the money you can make doing it