Analysis on how investors can hold stocks for the long term in the face of drawdowns

We believe that the maturity of the market requires mature investors. As long as we firmly believe in the long-term positive trend, stick to rational investment, scientific allocation of assets, and improve risk awareness during the trough, we will be able to fully enjoy the dividends of economic growth and obtain expected returns. Today, the editor will share with you how to hold long-term investors in the face of retracement, for your reference only!

How to hold long-term investors in the face of retracement

Facing short-term Investors may understand the reason for long-term holding of internally volatile market trends, but how to implement it specifically? In this regard, the following suggestions are made for investors:

1. Face market fluctuations rationally and correctly Understand the mid- and long-term value of the equity market

Wide market fluctuations also breed investment opportunities. Currently, we remain optimistic about the market’s mid- to long-term performance. In particular, sectors whose valuations match their performance and whose performance has good elasticity during the economic recovery process will become the new focus of the market. At the same time, after sufficient adjustments, some outstanding white horse leaders can also rely on the growth of their performance in the long run. Gradually digest the early high valuation.

2. Do a good job in asset allocation and smooth fluctuations through diversified positions and balanced allocation

We have always been familiar with asset allocation, and its significance can be shown even more in volatile markets. By allocating funds to different major types of assets such as stocks, bonds, commodities, etc. to form your own "investment portfolio", you may be able to create a relatively smooth income curve. In other words, as the saying goes, don't put "eggs" in one basket. When investing in funds, try to avoid over-concentration in one industry or theme.

3. Appropriately lower investment expectations and build an investment portfolio that adapts to risk preferences

Investment is never something that can be achieved overnight. After experiencing rapid growth in the past two years, the equity market may tend to return to the mean, and increased volatility may become the norm and common sense in 2021. In the process of market correction, the medium and long-term investment value of some stocks has gradually emerged. Investors should appropriately lower their investment expectations, do a good job in risk prediction and risk management, and overcome the "get rich quick" mentality.

4. Participate in stages by means of fund fixed investment or batch buying

With the intensified market fluctuations, fund fixed investment is also a better way to participate. Use time to smooth out short-term fluctuations. During the process of increasing market fluctuations, buy in batches and disperse to achieve the effect of diluting costs and calming fluctuations. I believe in the power of persistence.

For investors with different positions

1. Investors with full positions

Don’t panic too much, avoid being blindly negative, adjust the structure appropriately, diversify investments, and reduce profit expectations ;

2. Moderate investors

Participate through fixed investment or batch buying. When the market adjustment is large, the portfolio allocation can be appropriately adjusted according to the situation;

3. Short position investors

When the market adjusts, it may be a good time for staged allocation. By selecting high-quality managers and high-quality funds to participate, we can grasp the latest investment direction and improve The possibility of earning excess returns when the market rises in the future.

As an investment tool for inclusive finance, public funds have experienced large retracements in recent days. At the same time, many fund companies and fund managers have expressed their experience to give investors confidence. For example, the manager of the Golden Bull Fund, which manages tens of billions of dollars, told investors: "Whether you are a fund manager or a Christian friend, when the market adjusts significantly, what you need most is to remain objective and calm, and to recognize the fluctuations in market sentiment. Will the so-called style switch affect the fundamentals, supply and demand, and structure of the companies we invest in? Will the competitive landscape change in the five or more years after the crisis? If after repeated discussions, the moats of these high-quality leading companies will not change. will change, then the emergence of this kind of "crisis" is actually the best time to buy funds and good companies."

The past performance of a fund does not predict its future performance. The performance of other funds does not constitute a guarantee of the performance of the fund. The net value of the fund will fluctuate due to factors such as fluctuations in the securities market. Investors need to carefully select appropriate products based on their own risk tolerance, investment period and investment goals and read the product legal documents in detail. For specific risks of the fund, please refer to the " Risk Disclosure" chapter. For fund investment strategies, investment scope, fund managers and other information, please go to the official website of the fund company.

The meaning of fund investment retracement

Retracement is a common term we use when investing. Often accompanied by retracements are the maximum retracement and retracement repair time.

Maximum retracement

The so-called retracement refers to the degree to which the net asset value falls downward after reaching a certain height; and the maximum retracement is the decline from the highest point to the lowest within a period The maximum value of points is the maximum loss that may be faced.

The calculation formula of the maximum retracement rate is: (previous highest value – lowest value during the period)/previous highest value.

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