Long holiday holdings or currency holdings?article to understand the market performance before and after the Spring Festival over the years

Another year's Spring Festival is approaching, and there are only two trading days before the Spring Festival in 2024, and investors will face a question before the long holiday: "holding coins for the holiday" or "holding shares for the holiday", which for different investors and in different market environments, everyone has their own answer in their hearts.

Investors who hold coins for the holidays may think that the Spring Festival holiday is long, and many variables may occur in the market, and leaving the market early can avoid certain risks and tend to hold coins for the holidays.

Investors who hold shares for the holiday may think that the funds that exit the market early after the Spring Festival need to cover their positions, and they are more optimistic about the market after the holiday and are willing to hold shares for the holiday.

How the specific market behaved before and after the Spring Festival, we represent the overall situation of the market with broad-based indices such as the SSE 50 Index, CSI 300 Index, CSI 500 Index and CSI 1000 Index, and observe the overall performance of the market before and after the National Day in the past 9 years, and the observation time is 10, 20, and 30 trading days before and after the Spring Festival from 2015 to 2023, of which T day is the last trading day before the Spring Festival. The following figure shows the statistical results.

Figure 1: The performance of the SSE 50 Index around the Chinese New Year since 2015

Data source: Jukuan JoinQuant platform, as of March 13, 2023

Figure 2: The CSI 300 Index has performed around the Chinese New Year since 2015

Data source: Jukuan JoinQuant platform, as of March 13, 2023

Figure 3: The CSI 500 Index has performed around the Chinese New Year since 2015

Data source: Jukuan JoinQuant platform, as of March 13, 2023

Figure 4: The CSI 1000 Index has performed around the Chinese New Year since 2015

Data source: Jukuan JoinQuant platform, as of March 13, 2023

Judging from the above-mentioned income data in the past 9 years, in terms of the winning rate, the winning rate of each broad-based index before the Spring Festival is low, which may indeed be due to the decrease in the activity of institutional funds before the Spring Festival, hedging funds, northbound capital outflows and other factors, and the probability of the market falling is greater. After the Spring Festival, the return of over-the-counter funds and the active trading sentiment after the holiday have more factors driving the market up.

In terms of average returns, the returns of the broad-based indices before the Spring Festival were low or even negative. After the Spring Festival, the return of the index was generally positive, but because the market as a whole was more optimistic in 2015, there was a certain increase before and after the Spring Festival, which had a greater impact on the average value.

The above is the market performance before and after the Spring Festival in the past 9 years, but the calendar effect is only a statistical result, the historical law can only be referenced, and must not be invested in this way, the performance of the market is the result of a combination of various factors, and there is no immutable law.

For this year, the market fell sharply in the first two weeks of the holiday, and the decline of the weighted sector with a large adjustment in the early stage was more controllable, while the small-cap and micro-cap sectors concentrated in quantitative trading fell greatly, and even a certain liquidity crisis, but it has rebounded to a certain extent in recent days.

From the perspective of historical law, although the probability of rising after the holiday is relatively large, we cannot predict the market. For investors who are more optimistic about the market outlook, under the current situation of deep adjustment, the market liquidity will be relatively abundant after the holiday, and there is indeed a possibility of a certain rebound after the short-term overshoot. If you are more cautious about the market outlook, investors can also choose to hold currency for the holiday, and idle funds can also obtain certain capital income during the long holiday through low-volatility products such as reverse repurchase of treasury bonds or short-term bond funds and interbank certificates of deposit.

Risk Warning:

The information in this article comes from public information or interviews with investment managers, and the relevant data is only for the purpose of wealth research, and does not represent a substantive judgment and guarantee on the authenticity, accuracy and completeness of the data source, and does not constitute any investment advice, please refer to it carefully.

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