If I hadn't looked at this set of data, I might not have been able to withstand this round of decline...
GUIDE
summary
1. Today's stock market out of the "A-shape" market, what is the reason for the afternoon diving?
2. Can I make money holding a partial stock fund for 3 years? Is 3 years considered "long-term holding"?
3. What does a good buy look like? How far are we from it?
Truth vernacular to talk about finance, financial management does not say things against the heart
--This is the 950th vernacular finance--
On the first trading day of June, Big A barely got out of the door, but the process was slightly tortuous.
In the morning, the market was booming, it was the "Children's Day gift" market, but in the afternoon, the wind and clouds changed, and the dive came unexpectedly, and in a blink of an eye, it became the "child robbery" market.
Today, individual stocks are up and down, but not much. The turnover of the two cities was 986.6 billion yuan, approaching trillion yuan. Northbound funds sold a net of 1.802 billion yuan, and the outflow in the afternoon was obvious.
(Image source: Oriental Wealth App, as of 2023/6/1, no investment recommendation.) ）
01
What is the reason for afternoon diving?
(Image source: Oriental Wealth App, as of 2023/6/1, no investment recommendation.) ）
Let's talk about two quotes first. A-shares today walked out of an "A-shape" that rose first and then fell, and there was a wave of obvious diving in the afternoon. This cauldron, you may have to let the exchange rate back.
(Image source: Oriental Wealth App, as of 2023/6/1, no investment recommendation.) ）
In the afternoon, the offshore yuan exchange rate suddenly plunged and soon fell below the 7.13 mark.
Subsequently, northbound funds began to shift from inward to outward, and exchange-sensitive Hong Kong stocks took the lead in diving into the water. The Hang Seng Technology Index rose more than 2.6% at one point, narrowing its gains to 0.11% by the close. A-shares were also affected in the afternoon, and the counteroffensive market came to an abrupt end, and it was a familiar plot.
I have to say that the recent market is indeed a bit bleak, a little abrasive, a little difficult.
We often see comments in the background: the fund has also been bought for a few years, why has it not seen profits? How long is long-term holding?
Let's take the not short example of holding for 3 years to talk about this topic.
02
Can I make money holding a fund for 3 years?
In the chart below, the blue line is the biased hybrid fund index, and the red line is the return of each time point in the past 3 years.
In other words, the red line is how profitable it is to hold a partial equity fund for 3 years.
(Data source: Oriental Wealth Choice data, partial equity hybrid fund index is Dongcai series index, code 809002. EI, as of 2023/5/31, no investment recommendation. ）
Since 2007, there have been three climax of the money-making effect. In 2007, the market was dry to 6,000; In 2015, the big market did 5,000 points; And 2021, that is, the round of the market two years ago.
Of course, the trough after the high is inevitable. In the three periods of coloring in the chart, the yield turned negative, that is, holding for 3 years is still losing money.
In general, holding a 3-year partial stock fund and making money is a high probability event.
Because the red line in the figure is above the 0 axis most of the time, the time period of the three losses is not long, and the amplitude is not large.
But if you buy at the top of the market, it is also objective that you cannot make a profit for 3 years.
The one in early 2011 coincided with the summit of 2007 three years ago; The time in 2018 coincided with the summit of 2015 three years ago.
As of yesterday, the partial stock fund index has a return of 17.47% in the past 3 years.
That is to say, those who entered the market in May 2020, if they did not increase their positions significantly at the high level in the future, are likely to make money.
However, since the high point of the last round of the market occurred in February 2021, if the market does not improve in the future, then at the beginning of next year, this data is likely to turn negative again.
Therefore, the general direction of long-term holding is correct, but buying points will greatly affect how long the "long-term" is.
If you happen to buy in the "Everest" area of a round of the market, 3 years may not be enough.
03
What does a good buy look like?
Since investment timing is important, what does a good buy look like?
In the chart below, the blue line is still a biased hybrid fund index, but the red line is the return of the next 3 years at each point in time.
In other words, the red line is equivalent to us using the rearview mirror to see the real investment value of the market at that time.
(Data source: Oriental Wealth Choice data, partial equity hybrid fund index is Dongcai series index, code 809002. EI, as of 2023/5/31, no investment recommendation. ）
Since we don't have the ability to predict the future, the red line is only until May 2020. But if you can find a little pattern in the previous data, you can actually estimate the current situation.
It is not difficult to find that there is a certain negative correlation between index points and investment value. The high tide of the index often corresponds to the trough of the investment value, and the trough of the index often corresponds to the peak of the investment value.
"Chasing up the poor for three generations, absorbing the rich for a lifetime", sincerely do not deceive me.
In the figure, the "excellent buying point" with a 3-year yield of more than 100% has appeared a total of two times, which is the colored area in the figure.
If you look closely, there is a small rule in these two periods: the adjustment from the previous round of market highs is strong enough.
On the one hand, this strength is space, and the decline should be large enough to smash the cheap price out; On the one hand, it is time, and it is necessary to fall long enough to grind confidence to the end.
There are also opportunities for one or the other, such as in 2009. The decline is not small, but not long, the investment value does exist, but not too exaggerated.
In the "excellent buying point" of 2012-2013, the lowest point of the partial stock fund index was 3236.85, which appeared in December 2012.
At this time, five years have passed since the previous high of October 2007, with a drawdown of 43.07%.
In the "excellent buying point" in 2018-2019, the lowest point of the partial stock fund index was 5619.11, which appeared in January 2019.
At this time, three and a half years have passed since the previous high of June 2015, with a drawdown of 44.40%.
So, now what?
As of yesterday (May 31, 2023), the biased fund index is 10684.84, more than 2 years after the previous high in February 2021, with a drawdown of 26.85%.
Although it is still a little far from the previous lowest point, it is getting closer and closer.
Note that the red line representing the value of the investment is continuous, and a good investment opportunity is a region and not just the lowest point. As space and time adjust, the increase in investment value will start early.
So, despite the recent tough market, there is a lot of pessimism. But the red line that is not visible now, representing the real value of investments, may be a different picture.
The pessimists are always right, but the world belongs to the optimists. Encourage everyone at low tide~
04
Investment indicators
(Data source: 10-year treasury bond yield data from China Securities Index Company, CSI 300 point and price-earnings ratio data from Oriental Wealth Choice data, as of 2023/6/1, no investment recommendation.) ）
Note: The valuation of the index can be judged by the historical percentile of the index's current price-to-earnings ratio, the smaller the historical percentile, indicating that the lower the current valuation position compared to the historical level, the more investment value it may have. (Data source: Oriental Wealth Choice data, as of 2023/6/1, the percentile data statistical range is the index base period to date, and the ROE data is the latest quarter.) Past performance and trend style are not indicative of future performance, do not constitute investment advice, the market is risky, investment needs to be cautious. ）
disclaimer
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