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the header image is generated by doubao, prompt word: stock investors

the stock market has experienced a long-awaited and sustained strong rise. i judge based on my experience of experiencing all the bull and bear cycles of a-shares for more than 30 years:a comprehensive and deep bull market has undoubtedly arrived!

i have been saying some time ago: only when macroeconomic policies are fully reversed will the stock market bottom out and go bullish. now, we see that monetary policy is turning to comprehensive easing, and "active fiscal policy" has arrived...

as for, will the bull market last for a long time? then we have to look at the sufficient condition of "structural restructuring" of the market... this is a suspense that has yet to be solved.

is the market’s current surge reasonable?

in the week before the holiday, the market continued to rise sharply, with all large, medium and small-cap stocks rising. large-cap stocks rose slightly less, while small- and mid-cap stocks rose more. the highest one-day trading volume exceeded 2.5 trillion, setting a record high.

first of all, according to economic laws, against the background of extremely loose currency and very active fiscal policy, there is no reason why the capital market should not be bullish! so the big rise is reasonable.

typical examples overseas are that the japanese stock market and the u.s. stock market have long been bullish. looking back at the history of the domestic stock market, the same is true. the picture below shows the a represented by the shanghai and shenzhen 300 index after three rounds of domestic monetary and fiscal policy stimulus in the past two decades. according to stock trends, a shares have approximately doubled in value after the introduction of stimulus policies.

secondly, from the perspective of a-share market valuation, after three years of downturn, the average price-to-earnings ratio of the shanghai and shenzhen stock markets is at its lowest level in history (as shown in the figure below). gold will always shine.

finally, and the most critical factor is a comprehensive shift in policy.the comprehensive shift in policy has not only changed domestic investors' expectations of the market and economic fundamentals, but also reversed the pessimistic view of global investors on the prospects of domestic assets.

based on the above factors, it is logical for a-shares to enter a bull market.

is there still room for the stock market to rise?

the continuous k-lines in the stock market are in the red, adding a lot of joy to the national day holiday. while most investors are happy, many are also worried. some people worry that such a market will go crazy and be over all of a sudden.

i think there is no need to worry about this at the moment.

first, from a macro perspective, the degree of securitization in the domestic market is low, and social financing has always relied mainly on banks, that is, indirect financing dominates, while direct financing support based on the securities market is insufficient.

according to the latest data, the market value of the u.s. stock market accounts for about 2.44 times of gdp, and the total market value of the chinese stock market accounts for about 0.62 times of gdp.obviously, the total market capitalization of china's stock market accounts for a relatively low proportion of gdp. if the total market value of china's stock market as a proportion of gdp is doubled in the future, the market value will reach at least 252 trillion yuan (calculated based on china's gdp of 126 trillion yuan in 2023).

as of september 30, after the sharp rise, the total market value of a-shares only reached 84.67 trillion yuan. therefore, there is considerable upside potential and room for growth in the chinese stock market.

secondly, even after a week of strong gains, the overall market valuation is still low. although many small and medium-sized start-up companies have inherited the "glorious tradition" of a-share surges in the past and quickly skyrocketed to overvaluation, the valuations of large-cap high-quality companies that are the core of the market are still far below the historical average, and there is still a lot of room for improvement. repair space upwards.

once again, this round of monetary and fiscal policies came suddenly and was a 180-degree turn. in the past three years, due to the continued downturn in the market, investors have been extremely pessimistic, and funds have been withdrawn. the positions of domestic balanced public funds, private equity funds, and individual investors are very low, leaving only huijin to lead the "national team" to support the situation.

one typical example is: according to public information, a certain internet celebrity private equity lady has been shouting about "short squeeze" and "big bull market" for a year. as a result, the fund she manages holds very low positions. this week, the fund's the net worth barely moved, perfectly short-circuiting this round of surge.

all in all, when an extraordinary opportunity comes, these shorted funds will inevitably come back into the market, and there is no shortage of funds to support the market in the future.

moreover, the market is hot and the enthusiasm of domestic investors has been ignited. many friends who work at securities firms have told me that they need to work overtime during the holidays to handle the opening of new investor accounts, which has become a happy worry during the holidays.

finally, the rebalancing of international capital will also bring about continued capital inflows: in the past ten years, not only have european and american stock markets hit record highs, but the stock market indexes of countries such as india and japan have also doubled. the chinese stock market remains unchanged, which can be said to be a "lost decade."

international capital is mobile, and the process of capital pursuit of profit must flow from high valuation to low valuation, from extremely low allocation to normal allocation or even high allocation.

since the beginning of this year, the central banks of europe, australia, and canada have cut interest rates many times, and the federal reserve has also begun cutting interest rates recently. the liquidity released will flow to our market depression.

what should investors do now?

i said: cold salad! this is a joke.

i remember that at the beginning of the year, when a-shares fell to multi-year lows and investors were pessimistic and disappointed, this article in qinquan wrote an article "will a-share flowers bloom again?" it reminds that according to historical rules, when a-shares are extremely depressed, it is the right time to take action. the best time to invest and seize the opportunity to make big money in the future.

if investors follow the advice and buy good a-share companies this year, they will indeed get a good price. "good company" plus "good price" are the cornerstones of successful investment. once the cornerstone is laid, just stick to it for the long term.

the bull market has finally arrived, so of course we must cherish the opportunity. i think the big principles are "dare to hold" and "dare to make profits". why use the words "dare" and "dare"? because this is exactly what ordinary investors lack most.

among the investors i have come into contact with, the most typical thing in the past was to sell when the price rose a little, and then switch between different companies... in this way, you must have picked up sesame seeds, but lost the watermelons. in the end it's hard to get anything.

more investors are betting on the big gains of the past week, and i don’t think it’s really a big deal. at present, the real economy has not improved significantly, and structural transformation still needs to begin. if the economic fundamentals can continue to improve, and the market and economic structure are transformed smoothly, then the bull market will continue to be long. if you patiently wait for "good prices" to buy "good companies", the returns will be huge in the future.

many investors are worried about missing out on these days, weeks or months, so they enter the market and buy at will at any cost. then there is a high probability that they are acting as takers and buying a lot of worthless "a" stocks. "buyers are not as good as sellers" is an ancient saying. didn't you see that this week when the market surged, a large number of major shareholders of listed companies have issued announcements to reduce their holdings, and more are on the way.

although a-shares have surged for a week, there are still many investment products with long-term allocation value. for example, according to the current price level of a-shares, the dividend yield of high-quality banks and insurance companies is about 5%, and the dividend yield of leading companies such as milk and home appliances is more than 4%. several leaders who were once considered by investors to be "eternal gods" the dividend yield of this liquor company is 3%...

by investing in the stocks of the above-mentioned high-quality companies, the annual dividend rate is much higher than that of residential investment, and it is a permanent property with no depreciation and no need for repairs and maintenance. even if the bull market does not last long, it will still be these good companies that can allow investors to ride through the bull and bear markets. and if you hold these good companies for a long time, even if the bull market never comes again, you can still make your money back slowly by relying on the dividends of listed companies.

all in all, a bull market is hard-won, and investors should "invest and cherish it."