Whenever there is a stock market crash, it reminds me of a TVB drama named “The Greed
of Man” (大時代). Everyone predicts the stock market will fall because of the war tensions.
Yet, the stock market rises unexpectedly on the “Day of Miracle". The villain made the wrong
bet and jumped off from the top of the building. Attracted by profitable returns, most people
want to succeed in the stock market but their decisions are always affected by emotions and
the result always comes out of their surprise.

During the bear market, people feel pessimistic and they tend to avoid loss rather than
realise the possibility of gains. Although it is one of the best timings to purchase stocks, they
seldom do so in order to avoid further loss. On the other hand, many people, including the
elders without any investment knowledge or experience, would rush to purchase stocks
when there is a boom in the stock market. They don’t want to fall behind by others. However,
most people actually have not evaluated the stocks yet and these timing are usually the days
before the burst of the bubble.

We all know the basic principle of purchasing stocks is “buy low, sell high”. But most people
always do the opposite in reality. This behaviour seems irrational but understandable as we
never know when the “true” low point or high point is. This explains the risks of buying
stocks.

To live a healthier, longer, better life, we need a long-term investment plan. We have to plan
ahead in case of an economic downturn and volatility in the market. Investment is not
gambling. Gambling is often irrational but investment could be rational if you allocate your
assets well. We should not put all the eggs into one basket. Instead, we need to diversify
the risk. For example, you can allocate your money into various financial assets such as
bonds and commodities (or you can buy funds) instead of solely investing in stocks. This can
make your portfolio less volatile and thus generate a more stable return.

Driven by greed, people always want to get more. In reality, they always pay more. The
reason behind is they lack appropriate long-term financial planning. Thus, a financial
coach can guide you to make informed financial decisions and construct a portfolio
according to your own risk aversion and return preferences, to live a healthier, longer, better
life.