Recently, I saw some small and medium-sized stocks holding a lot of cash, and they reluctantly repurchase their stocks every day, reminding me of the fact that cash is king. Everyone in the bear market often says that “cash is king”. How do you understand the phrase “cash is king“?
My own opinion is that cash is king. It is not as simple as holding a cash bear market. It is because the bear market has too many flat goods to sell, but if you have no money and no purchasing power, then even if there are many stocks. Cheap also has nothing to do with you. Only if you have ample cash on hand, you can appreciate the coolness of buying a flat in a bear market. Therefore, you are good at using your cash. In the bear market, “shopping” is the true meaning of cash. If you have crossed the bear market and you are still full of cash, you basically have not enjoyed the feeling of cash being king.
Of course, the bear market can only ensure that you can buy bargains, but it is not easy to buy them at the bottom. Therefore, my own practice is to absorb them in stages, and I will gradually convert the cash in my hands into stocks.
The importance of diversification