The A-share market in 2024 seems to have started a new round of decline. The rebound in large index stocks, which should have brought hope to the market, instead triggered a broader decline. What the hell is going on? Is there another "predator" playing tricks? Where do retail investors go from here?
The false boom in large indicator stocks
This morning, after the opening of the A-share market, large index stocks such as banks, oil, and coal rebounded. The banking index rose more than 1%, PetroChina rose nearly 1%, and the coal sector even rose by 2%. The social security heavy position index also rose by 0.59%. The data looks like it's sending a positive signal to us: the market is finally getting better!
But is this really the case?
Attentive investors soon discovered that the rally seemed to be short-lived. Northbound funds began to operate the liquor sector in a big way, while the new energy leader CATL saw a decline of 1.74%. What is even more worrying is that the securities sector fell by 1.58%, which has put huge pressure on the overall market.
The collective wail of small- and mid-cap stocks
Compared to the short-lived boom of large index stocks, the performance of small and mid-cap stocks can be described as miserable. The real estate sector fell 1.95%, making it one of the biggest decliners. A total of 4,532 stocks in the two cities fell, almost one-sided.
What's even more chilling is that the average stock price index of A-shares fell by more than 1% in the morning. This means that even if you buy a stock randomly, there is a high probability that you will lose money.
A brokerage analyst said: "At present, market confidence is seriously lacking, and trading volume continues to shrink. The first-hour trading volume of the A-share market this morning was only 92.7 billion yuan, a sharp contraction from 116.4 billion yuan in the same period the previous day. This shows that investors generally have a wait-and-see attitude and are not willing to enter the market easily. "
The mysterious operation of northbound funds
In this market turmoil, the operation of northbound funds has attracted the attention of many people. According to media reports, northbound funds concentrated on the operation of the liquor sector today, but the specific reason and purpose are not yet clear.
Some market analysts believe that this may be because the liquor sector has been relatively stable in recent years and is regarded as a safe-haven variety. But some people have questioned whether northbound funds are using information advantages to carry out short-term speculation.
One fund manager said: "The operation of northbound funds is indeed worth paying attention to, but we should not read too much into it. Their investment strategy may be based on a variety of factors, including global market trends, industry outlook, and more. We should pay more attention to our own investment strategy and risk control. "
The underlying reasons for market fragmentation
Why is there a divergence between the performance of large index stocks and small and mid-cap stocks? This issue has sparked a wide discussion in the market.
Some experts believe that this reflects the development prospects of different industries under the current economic situation. Most of the large index stocks are traditional industry leaders, with stable cash flow and high dividend payout ratios, which are more favored when market uncertainty increases. Small- and mid-cap stocks, on the other hand, are mostly emerging industries or growth companies, which are more vulnerable to shocks when downward pressure on the economy increases.
But there are also those who have a different view. One private equity fund manager said: "This divergence may only be temporary. With the increase of policy support, the development environment for small and medium-sized enterprises is expected to improve. In the long run, some high-quality small- and mid-cap stocks may have more upside. "
The dilemma of retail investors and the way out
In the face of such a complex market environment, how should ordinary retail investors respond?
Some financial experts suggest that retail investors should stay calm and not blindly follow the trend. You can appropriately allocate some low-valued blue chip stocks, and at the same time pay attention to some small and medium-capitalization stocks with core competitiveness. At the same time, you should also be careful to control your positions and not put all your eggs in one basket.
However, for many retail investors, such advice may still be too general. Lao Wang said helplessly: "It's easier said than done." How can we have so much time and energy to study company fundamentals? And now that the market is so unstable, who knows if it will be another big drop tomorrow? "
Indeed, in the current market environment, retail investors face significant challenges. However, we should also recognize that every market correction may breed new opportunities. Perhaps, now is the time to re-examine our investment strategy.
Perhaps, what we need is not only patience and courage, but also continuous learning and improving our investment ability. After all, in this fast-changing market, only continuous progress can go further on the road of investment in the future.
What does the future hold for the A-share market? Can Big Indicator Stocks Continue to Lead the Market? Will small- and mid-cap stocks see a turnaround? There may not be a standard answer to these questions. But one thing is certain: as long as we keep a clear head and continue to learn and adjust, we will definitely find our own place in this market full of challenges and opportunities.
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