The initiation of this market trend was primarily due to policy benefits that enhanced market confidence and reversed pessimistic expectations, hence it is referred to as the "policy bull." However, fundamentally, China's economy has experienced a slowdown in growth over four years, coupled with the capital market's four-year decline, the market itself had a demand for a rebound. This time, the policy bottom and the market bottom resonated; the market, after falling to around 2600 points, which is the low point of these years, saw multiple departments jointly release policy benefits on September 24th. The timing of the policy's introduction coincided with the market's bottoming out, creating a resonating effect.

Many people worry that the current stock market recovery is merely policy-driven rather than a reversal of the market's own trend, fearing that the market may bottom out again. However, I believe this possibility is very slim. The policy bottom and market bottom have already formed, and the market trend has undergone a significant change. It is expected that the future performance of the market will exceed expectations, propelling China's capital market into a bull market. This bull market will bring substantial returns to investors, giving everyone a real sense of gain. Yet, it is essential to adhere to the concept of value investing, avoid using leverage, invest with idle money, choose stocks you understand, become a shareholder of excellent companies, or seize the opportunity of the bull market through investing in high-quality funds to achieve wealth growth.

Advertisement

The market trend has fundamentally shifted from a bear market to a bull market, and investors' thinking should also transition from a bearish mindset to a bullish one. A bearish mindset considers every market rebound as an opportunity to reduce positions or escape, while a bullish mindset believes the market trend is upward, with each new high being higher than the previous one and each adjustment low also higher than the last. Therefore, every significant market adjustment is an opportunity to increase positions. Characteristics of a bull market include sustained market turnover, even reaching 3 trillion during adjustments, with a normal daily turnover of over 1 trillion being considered large. Recently, the market turnover has consistently exceeded 1 trillion and has surpassed 2 trillion on many trading days. The second feature is a sharp decline after a rapid increase, as in a bull market atmosphere, investors are active in trading, and while turnover is amplified, market fluctuations are also significant. When the market rises, investor sentiment is optimistic, and when it falls, investors feel panic. Such significant fluctuations are characteristics of a bull market and help the market become more solid.

In a bull market, it is crucial to hold firm to your positions and maintain confidence; chasing rises and killing declines and frequent trading may lead to losses during significant market fluctuations. Therefore, I have always advocated the concept of value investing, hoping that everyone will maintain confidence amidst market volatility, become shareholders of excellent companies, not be intimidated by short-term market fluctuations, but achieve good returns through medium to long-term holdings. If the market fluctuates and panic selling occurs, it may lead to continuous losses, or even significant losses in a bull market.

Recently, as the market continues to rise, some major shareholders of listed companies have issued share reduction announcements, causing investor concerns that major shareholders' reductions may lead to the end of the bull market. First, the rapid market rise has led some major shareholders to reduce their holdings at high stock prices, out of self-interest, to cash out funds. However, the long-term trend of the market is jointly determined by policy, economic, and capital factors, and is not significantly related to major shareholder reductions. Of course, major shareholder reductions are a negative signal, and caution should be exercised with such companies, as it may mean that major shareholders believe the company's stock price has been overvalued. Conversely, for listed companies where major shareholders increase or repurchase stocks, more attention should be paid, indicating that major shareholders believe the company's stock price is undervalued and the company has long-term development prospects. Therefore, major shareholder reductions or increases provide us with important investment references but are not decisive factors for whether the bull market can continue, and this needs to be clearly understood.

The current market's advantageous trend is gradually being established, and many investors show a strong willingness to participate. However, when investing, it is important to grasp the rhythm. First, one should take advantage of market pullbacks to purchase quality assets and avoid chasing highs, as cost control is very important. Second, investors should focus on medium to long-term opportunities and avoid short-term trading, as short-term trading often leads to losses. Only by investing when there are good buying points in the market and holding for a period can one capture the bull market trend. Third, investors should avoid using leverage and not harbor a fluke mentality. As Buffett said, leverage can turn time from a friend to an enemy. In the past few years, many people have suffered losses due to leverage, and the market experienced a stampede event in the second half of 2015 due to deleveraging, with profound lessons learned. Therefore, investors should not borrow money to speculate in stocks or use leverage. Fourth, investors should view the stock market as a place for asset allocation, not as a short-term trading venue for chasing rises and killing declines. With the end of the golden investment period in China's real estate market, future wealth gaps between people will depend on whether they hold shares in quality companies or quality funds. Investors should view the capital market as a venue for equity investment, which will lead to a more stable mindset, allowing them to grow with excellent companies like Buffett or indirectly hold shares in these companies through quality funds to achieve wealth growth.

The stock market's surge has attracted some people who were not originally invested in the stock market, hoping to get a share of the profits. Although the pursuit of high returns is understandable, investors, especially novices, should pay attention to risks. Novices should control the amount of investment funds, suggesting that no more than 30% of investable funds be used to allocate stocks or funds, and most funds should be allocated to low-risk products, such as deposits, money market funds, bonds, etc. Experienced investors or those with higher risk tolerance can appropriately increase the proportion of equity asset allocation, but it is recommended not to exceed 50% to avoid putting all funds into the stock market to prevent excessive risk.

In addition, some people consider resigning to become professional stock traders, but this is very risky. Market fluctuations are inevitable, and resigning to trade stocks can put investors in a very passive position. Most people are not suitable to become professional stock investors and should maintain stable employment, treating stock investment as an asset allocation tool and an investment method for personal wealth growth. Investing in stocks or funds when there is leisure and spare capacity is the correct way to enter a bull market.