Analysis of Balanced Strategies Between 'Stock Accumulation' and 'Trading for Price Differences' for Value Investors

“Stock accumulation” refers to long-term holding to accumulate equity, relying on dividend reinvestment and long-term price appreciation; “trading for price differences” is short-term trading to capture price fluctuations. Taking the data of Luzhou Laojiao and China Shenhua over the past 5 years as examples:

• China Shenhua (601088.SH)
  ：From 2020 to 2025, the stock price increased by 60.3%, with a dividend yield of 7.4%-10.2%. The total return from long-term holding was approximately 115.86%, with an annual compound return of 16.8% [0]; the average return for frequent traders was only 42% [1].
• Luzhou Laojiao (000568.SZ)
  ：Although the stock price slightly dropped by 0.53% in the past 5 years, the total return from 2015 to 2025 exceeded 800%, and dividends continued to grow; frequent traders could hardly capture all the gains [0,1].

The core of ‘stock accumulation’ is to accumulate enough shares so that dividend income covers daily expenses. For example, China Shenhua distributed 22.5 yuan per 10 shares in 2024; if holding 100,000 shares, annual dividends reach 225,000 yuan [0]; Luzhou Laojiao distributed 58 yuan per 10 shares in 2024, and 10,000 shares yield an annual dividend of 58,000 yuan [0]. After reaching this critical value, investors gain investment freedom and can flexibly choose strategies.

Before accumulating enough shares, frequent trading for price differences is prone to the following problems:

• Transaction Cost Attrition
  : Costs like commissions and stamp duties reduce the compound interest effect [1].
• Missing Long-Term Gains
  : For example, Luzhou Laojiao’s 800% gain from 2015 to 2025 is hard for frequent traders to hold through the entire period [2].
• Distraction of Energy
  : Affects long-term judgment of the company’s fundamentals [1].

After reaching the critical shareholding value, ‘trading for price differences’ can be used as an auxiliary strategy, but the following rules must be followed:

• Proportion Limit
  : Only use less than 10% of the position for trading price differences, without affecting core equity [1].
• Valuation-Driven
  : Only trade when the stock price deviates from intrinsic value by more than 20% [1].
• Profit Reinvestment
  : All trading profits are used to increase share holdings to accelerate accumulation [1].

• Market Risk of Trading Price Differences
  : Luzhou Laojiao’s stock price volatility is 25%, so short-term trading is prone to losses due to timing errors [0].
• Dividend Policy Changes
  : If China Shenhua’s dividends decrease, the accumulation period for critical equity will be extended [0].

• High Dividend Reinvestment
  : China Shenhua’s high dividends can accelerate equity accumulation [0].
• Valuation Deviation Opportunities
  : When Luzhou Laojiao’s stock price is overvalued, trading for price differences can obtain additional shares [1].

1. ‘Stock Accumulation’ as Foundation
   : Prioritize high-dividend, fundamentally stable targets (e.g., China Shenhua), and accumulate critical equity through long-term holding and dividend reinvestment [0,1].
2. ‘Trading for Price Differences’ as Supplement
   : After shareholdings reach the point where dividends cover daily expenses, conduct short-term trading strictly according to rules, using only idle funds to avoid affecting long-term positions [1].
3. Avoid Complications
   : Simple stock accumulation strategies often bring better long-term results; avoid over-trading and decision-making entanglement [1].