Analyze how to spend garbage time on days when the market is slow
Faced with this kind of market situation, many Christian friends, especially new ones who have entered the market not long ago, have a feeling: add positions and are afraid of buying. On the mountainside, I am afraid of selling at the bottom of the mountain for clearance, and it seems that nothing is right no matter what I do. The editor here summarizes how to spend "garbage time" on days when the market is cold for your reference. I hope you will gain something from the reading process!
Most of the time A shares are "garbage time" ”
Judging from past history, A-shares have been in a volatile market with less rises and more falls most of the time. The rapid rise stage of A shares only exists for a short period of time, and most of the time it is relatively volatile.
We look back at the performance of A-shares in the past 16 years (2005-2020). Taking the Wind All-A Index as an example, the largest increase during the period was 166.21% (2007), and the smallest increase was -62.92% (2008). , the average is 25.21%, the standard deviation is 57.43%, and the standard deviation is nearly twice the average, indicating that the index rise and fall in most years deviates from the average, and the stock market volatility is still very high.
However, the market is constantly changing, and the future is unpredictable. Violent fluctuations in the short-term trading environment may have a certain impact on the current market trend, but over time, short-term fluctuations will not change the market. Long term trends.
In the past 10 years, the daily volatility of the CSI 300 Index has been relatively high, especially in declining markets. For example, from July 2015 to January 2016, the average daily volatility of the CSI 300 was 3.29%. , but in the long run, the CSI 300 shows an upward trend of shock.
If A-shares actually rise no more than 5% of the time, the market will sometimes be turbulent and may continue for a long time, but it is probably the 95% of the time that is easier to grasp. Only if you are prepared 95% of the time, you may be there during the 5% rise! Although garbage time is difficult, it is also important.
During the cooling-off period, better sort out investment expectations
This is the nature of the market, and it will have a negative impact on our asset returns from time to time. The cold market period also gives us investors a cooling-off period to think about the purpose of investment.
If we invest a sum of money, what will the money be used for in the future? What is the length of time to invest the money, the expected income, etc. For funds with different investment directions, future income expectations will also be very different.
How to establish reasonable expectations? Refer to the statistics of CITIC Securities. The income of different assets since 2016, past annual income and maximum drawdown can be used as reference values ??for us to set expected income and tolerable risks. .
In the absence of obvious market trends, short-term fluctuations mainly come from our own constantly amplified emotions. For example, investors are happy to see the high performance of their investment portfolio in the past, but are not aware of the accumulated risks behind it. When the funds they hold fall, some investors will overreact and think of selling high-risk equity funds, but they want to wait. If you buy it back when the market improves, you may not make any money, and it will only increase the investment cost.
Don’t give up easily, be more patient and wait a little longer
There is no market that only goes up but not down, and there is no market that only goes down but not up. The review is closer to us. In the two-year market, the general stock fund index has experienced several major retracements in 2019. After a short or long period of time, the market will still rebound.
From April 8, 2019 to June 6, 2019, the retracement was 12.39%; then it rebounded for more than 6 months, with a cumulative increase of 43.87%;
February 26, 2020 From September 3 to September 10, 2020, the retracement was 7.63 %; then rebounded for 5 months, with a cumulative increase of 31.53%.
From the market conditions in the past two years, we have learned at least one experience: be more patient and use your own funds. When the market falls, we should not give up our funds easily. More importantly, Looking forward, if you hold an excellent fund and your current position is not high, you can even increase your position at dips. This will allow you to get more cheap chips at relatively low prices, which will not only help dilute investment costs. , and at the same time help achieve faster return on capital and profits during the subsequent rebound or rise.
In addition, investors must also trust excellent fund managers. If a fund manager has experienced the test of market bulls and bears, and the fund income he manages is at the forefront of similar funds for a long time, then he is more likely to maintain his advantage in the future. .
Now we might as well learn to get along with the "garbage time" in the stock market, pay less attention to the short-term market, block out noise interference, and adjust our investment mentality. The short-term trend of the stock market may be determined by valuation, but in the long term it is determined by fundamentals. Only by surviving the garbage time in the stock market can you survive the clouds and see the moon.