The following are several signals that A-share trading volume has hit bottom:
1. Trading volume significantly shrinks to a floor level, with many individual stocks experiencing low trading activity.
2. Many stocks in the market reach new lows in their share prices over the past three years or even five years.
3. A number of listed companies begin to repurchase their own shares.
4. The management team continuously releases positive news.
5. Investor confidence is low, with the number of newly opened accounts hitting a multi-year low.
6. The average price-to-earnings (P/E) ratio and price-to-book (P/B) ratio of stocks reach multi-year lows.
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7. A large number of people are deeply trapped in their investments.
8. The issuance of funds encounters difficulties.
9. People are sensitive to negative news and numb to positive news.I need to clarify this point. Some fans believe that in a bear market, people should be sensitive to good news and numb to bad news — this is absolutely a misconception. The true characteristic of the bottom can only be expressed by the word "despair." Without despair, it's not a bear market. Only when people are desperate about the future market, numb to good news, and only see bad news can we talk about the bottom. The phenomenon of being sensitive to good news and numb to bad news can only appear in a bull market or halfway down the market.
10 The sound of bearish voices is endless in the media.
The current A-share market has all the signals of the market bottoming. The above 10 characteristics are being manifested in the A-share market.
The current A-share market is actually running in the big bottom. However, many people are not clear about the fluctuation range of the bottom and the time it takes to form the bottom. Seeing that the market has not risen under the good policy in the past few days, they have lost confidence and think that the market will still fall sharply. In my view, being at the bottom without knowing it is like being in a blessing without knowing it.
Twenty years ago, I read "Reminiscences of a Stock Operator." After reading this book, it triggered my deep thinking. Because I know that the protagonist of the book has three ups and downs, and finally committed suicide in failure. The protagonist was once rich enough to be a rival to a country, and with his speculative talent, he still failed in the end, let alone us ordinary people? What lessons should we ordinary investors learn from his failure?
At that time, I summarized the lesson that after making a lot of money, we should take out a part of the money. In this way, even if the investment fails, it will not be a total loss. There is no invincible general in the world, and good fund management and leaving a way out are the key.
Later, I read his book again and found that he almost traded full position every time, and added leverage or kept adding positions in one direction. This made me realize that he did a very poor job in risk management. Heavy position and leverage are the reasons for his rapid acquisition of astonishing investment returns, but also the root of his rapid failure. It is precisely "both success and failure come from the same person."
I have since realized that adding positions should be moderate, and the use of leverage should be cautious. It is better to make money slowly and control risks well. Even with Livermore's intelligence, he still made wrong investment judgments, let alone you and me as ordinary people? Therefore, I think risk control is as important as the brake system and seat belt.
Due to such reading cognition, I have gradually established a stable investment system with stock portfolio as the core, fund management as the outline, and asset allocation as the execution strategy. Risk control has been placed in the first place in my investment.Ever since I started doing this, not only have my investment returns become more stable, but my investment mindset has also greatly improved. The positions in my hands no longer fluctuate excessively, and I am not exposed to significant investment risks, which naturally leads to a much better state of mind. My life also appears to be much warmer.
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