US Nasdaq, Golden Dragon China Index Fall; FTSE A50 Futures Surge

The performance of the A-share market in recent days can truly be described as a roller coaster ride, with declines causing panic and rebounds reigniting hope. Some believe the bull market is still in...

The performance of the A-share market in recent days can truly be described as a roller coaster ride, with declines causing panic and rebounds reigniting hope. Some believe the bull market is still in place, akin to finding treasure at a low price; others think the bull market has ended and are rushing to "escape for their lives." These two completely opposing sentiments are nothing more than a vivid portrayal of investors' greed and fear. Emotion itself is a part of the stock market, and "small fluctuations" in a bull market always lead to speculation about whether the future will be full of spring blossoms or biting cold winds.

The dynamics of the external market have further muddied the waters. Looking at the U.S. stock market, those large internet companies, such as Tencent and Alibaba, have not been performing well recently, dragging down the entire China concept stocks. Meanwhile, the FTSE A50 futures have been rising, especially with the news of the merger between Guotai Junan and Haitong Securities, the momentum in the brokerage sector has instantly pulled the index up. It is evident that this rise is more driven by the "news market" rather than significant changes in fundamentals. The good times for U.S. stocks and the gloom for China concept stocks illustrate a problem: the market is fragmented, and this fragmentation is not only reflected in the stock market but also in investors' emotions.

Returning to the A-share market, there is no shortage of "substantive" policies. The central bank has made a grand gesture with 500 billion yuan in swap facilities and 300 billion yuan in repurchase loans, and is still studying a stabilization fund, claiming to hold up the "protective umbrella" of the market. Judging by the strength of these policies, they are certainly enough to boost confidence, but it will take a little time for the policy dividends to take effect. More interestingly, this is the first A-share bull market dominated by algorithms and artificial intelligence, where every fluctuation is rapidly amplified by algorithms, as if the market has suddenly become more "emotional." In the past, when the market fell, everyone had to wait and see; algorithms do not have emotions and can instantly amplify emotions several times, making fluctuations more intense.

At this time, mentality becomes particularly important. Market fluctuations are the norm, whether it's a rise or a fall, one must remain "calm." As mentioned in the article, there are several major investment theories: in the short term, the stock market is a "voting machine," whatever people say is what it is, and the votes lean towards which side, that side will rise; in the long term, it is a "scale," and the value of a company still needs to be weighed over time. There is also an old saying that buying stocks is buying the future of a company. If the future cash flow of the company you buy can grow steadily, market fluctuations are actually an "opportunity to get on board," rather than a panicked "escape signal."

However, many times, "getting on board" and "getting off" is a false proposition. Because no one can accurately step on every bottom, and no one can accurately predict every peak. There are fluctuations in a bull market, and there are rebounds in a bear market. What truly determines your success or failure is still your mentality and strategy. Do not be easily swept away by market emotions; learn to remain calm in madness and to act decisively in panic. It's like being in a relationship: do not get carried away in sweet times, and do not easily talk about breaking up during arguments. Long-lasting relationships rely on steady progress, not on fleeting enthusiasm.

Speaking of those "big moves" on the policy front, these policy tools are like time bombs, ready to ignite market enthusiasm at any time. Perhaps one day, the "500 billion yuan swap facility" will suddenly ignite a wave of the market, and everyone will rush back to "grab shares." But speaking of which, the intense fluctuations in a bull market are actually a good thing. It is precisely because of the large emotional ups and downs that there are more opportunities for everyone to choose. However, not everyone can withstand the excitement of this "roller coaster" style.

The ups and downs in the stock market seem unpredictable, but in fact, there is a common logic behind them: the market is always full of uncertainty about the future. Especially in the current context of increased global economic uncertainty, the A-share market will naturally fluctuate. But looking at historical experience, behind every significant fluctuation is the process of the market repositioning and searching for direction. Therefore, do not be thrown off by short-term fluctuations. The more the market sentiment is divided, the clearer your investment logic should be.