Recently, the continuous downturn and continuous ** trend have made many investors have a serious pessimism about their portfolios, and they always feel that they are falling and falling, and they don't know when it will end. This is actually because the market has been falling for a long time, so many people have lost confidence, in fact, how big is the decline compared to October 2022? It's really not that big.
It feels harder and more scary at this moment than then, probably just because the memory of 15 months ago is a little blurry, and the memory of this moment is more vivid. So, why is there a continuous ** in the current market, let's analyze the specific factors, maybe you won't think it's scary.
First of all, from the macroeconomic perspective, since 2023, China's economy has withstood the downward pressure brought about by the intertwining of risks and challenges from abroad and multiple domestic factors, and GDP has increased by 5% year-on-year in the first three quarters2%, the economic growth rate further rebounded to the potential growth level. Although the economic recovery is not as good as expected, it is impossible to say that it will lead to the continuity of the market. Looking forward to 2024, the trend of further economic stabilization and recovery will not change, and the market may slowly recover or consolidate, but the macro conditions are not available.
Secondly, from the perspective of market sentiment, investors' sentiment and mentality do have an impact on market trends. When the market sentiment is pessimistic, investors may sell their holdings in droves, resulting in a continuous market breakout. For example, when the dot-com bubble burst in 2000, investor frenzy for tech stocks quickly turned into panic, leading to a sharp decline. Therefore, the impact of irrational emotions on market volatility is still quite large.
In addition, from the perspective of technical factors, whether it is a trend-based trading at the right time or a strategic trading with mean reversion, it will either directly participate in the homeopathic fluctuations of market sentiment, or it will lead to forced liquidation due to the failure of the trading algorithm, which will further amplify the market's sentiment. These methods will lead to a rapid and large number of markets, such as the flash crash in the United States in 2010, which led to a sharp ** in a few minutes on the New York Stock Exchange.
Finally, when investors face uncertainty and risk, they may engage in collective selling, leading to a continuous market performance. That is, the market continuity caused by panic selling**. For example, when the pandemic hit in 2020, there was a lot of volatility around the world, and investor panic triggered a massive sell-off.
Overall, the emergence of a continuous** market is a complex phenomenon that is influenced by a variety of factors. Investors need to comprehensively consider macroeconomic factors, market sentiment, technical factors and other factors, and form their own rational cognition to avoid the risks they face and make correct investment decisions.
In the face of ** fluctuations, the only thing investors need to do is not to be frightened by the current ** and make irrational operations of exchanging equity for cash. Compared with October 2022, when the CSI 300 fell by nearly 30% during the year, but after two months to the end of 2022, the annual decline was less than 1%. That said, the last two months of 2022 saw more than 40% of the market**. Anything is possible, no matter how much we research and interpret it, the market just reacts on its own.
You want it to go up or down, and it doesn't have a dime of impact on the market. On the contrary, these thoughts will only make you more miserable, irritable, depressed, and even lose your mind and make investment decisions that you will regret in the future. Therefore, the most important thing we should do now is to sit still, whether it is to move bricks and work, or brag, as long as we stay away from the market sentiment, then it is right.