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90% of retail investors lose money during stock crashes because they fall into five fatal traps. This article exposes the five things the ultra-wealthy never do: panic-selling, stopping dollar-cost averaging, trying to catch the exact bottom, using leverage, and abandoning their strategy. Master the contrarian mindset and turn every crash into your ticket to wealth.
That friend who never watches the markets starts asking you what to buy now. Two office workers at a convenience store chat about "AI—if you don't buy now, you'll miss out." Nobody in the group is talking about risk anymore. These are the most dangerous signals. With TAIEX at 43,500 and U.S. stocks repeatedly hitting new highs, the fully-invested are walking toward a cliff. Understand these three crash warning signs, and retail investors can survive a crash—no one needs to precisely predict the top; you only need to know that when these three signals appear at the same time, your behavior has shifted from investing to gambling.
Years ago, I was also a fool who stared at candlestick charts deep into the night, convinced I could bottom-fish and escape at the top — until the 2020 pandemic crash wiped out the down payment I'd saved for a home. A crash is never a wipeout to zero, so why does it bankrupt some people and leave others untouched? This article uses the "Jenga Tower Effect" to dissect the true nature of a crash, explain why no one can precisely predict the bottom, and lay out the three iron rules for retail investors to survive a crash.
With the Taiwan Stock Exchange (TWSE) at 43,500 and the US S&P 500 at record highs, group chats are filled with people shouting "this time is different." But the playbook that played out in 2000, 2008, and 2022 keeps repeating: the final leg of every major bull market is exactly when the most retail investors pile in fully invested and the most people get trapped at the top. This article breaks down three warning signs that are unfolding right now but 90% of retail investors cannot read: retail margin balance hitting record highs, P/E ratios deviating sharply from historical averages, and volatility indices collapsing. It then runs three side-by-side accountings of fully leveraged margin versus phased allocation, closes with four iron rules, a four-step action plan, and two Taiwan-specific traps most people overlook (ETF premium/discount mechanics and dividend tax plus Second-Generation National Health Insurance supplementary premium). The most expensive thing at the end of a bull market is not the stocks themselves; it is your indifference to risk.