Two reasons cause individual investors to lose money

In China, individual investor are called leeks. When bear market comes, they will lose their capitals and leave stock market. When bull market comes, more individual investors will appear and input huge money to the market. This process repeats as bear and bull alternate.

In fact, it is very difficult for an individual investor to gain money from the stock market. A lot of people already made analysis about this. Today, I will analyze two reasons with two simple mathematic calculations.
Most individual investors like frequent trading, they buy and sell every day without pausing. In reality, making transaction must pay commission fee. We assume the fee is 1% of the amount of capital. In addition, we assume that the number of transactions are 50 times. It is reasonable to make a transaction every week. The initial capital is one million dollars. There is no gain and no loss every transaction. How much will be left after 50 transactions? - Best Things to Do Around the World
Even though the commission fee is only 1%, the capital will become 0.61million dollars after 50 transactions without gain and lose. In summary, commission fee is a very important factor that investors have to consider.
When up/down percentage is the same, the stock price will go down. It means that investors will lose money. We assume up/down percentage is +/-10%. In Gain/lose column  the minus number is always greater than plus number. After several cycles, the stock price will become from initial price 100 to 94,15. It means that it will take a longer time to recover to the same price.

Of course, stock market is not a basic mathematic calculation. Stock market is not a science, there is no absolute true or false, otherwise, mathematicians would become millionaires easily by investing stocks.
In reality, stock market is more like an art, different persons observe one piece of art from different perspective.
Art also follows some basic common rules, otherwise, there would be no beauties. A masterpiece is made up of right proportion, matched colors and proper background. To some extent, stock market also has these characters same as arts. What we learn from investment is to find the common rules.
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