Us inflation 7.5%, the Nasdaq two days down 700 points, A shares will continue to fall?
At present stock people or base people or, the most discussed one thing is A shares will fall how long, when will start to rise?Should we sell it if it continues to fall?If the future began to rise, should not start the initial warehouse, but will not be worried about the bottom of the hillside.How to do?01. When discussing the situation of overseas stock markets, one factor that must be taken into consideration is the trend of THE US stock market.The drop in overseas stock markets in January was largely due to the Fed meeting in late January.Before the meeting, it was unclear if and by how much the Fed would raise interest rates.Now, it looks a bit like that.Recently, THE CPI of the US was released, and the latest figure reached 7.5%. There is still some time before the March meeting, and people are beginning to worry about whether there will be an emergency rate hike or whether there will be a 50 basis point increase at the March meeting.However, after the rapid decline in January, both the inflation data and the Fed’s interest rate hike expectations have been fully priced in, and it is not likely that overseas stocks will fall significantly again before early March.I believe that in the future, the main factors affecting the trend of A shares will not come from overseas stock markets, but from their own.This is already evident in Hong Kong’s Hang Seng index.The Hong Kong stock market, which was low in December, did not fall in January, but rose, until it fell a little in the days around the Fed meeting and started rising again in late January and early February.Although there are shocks these days, the overall view is still rising.Hong Kong’s stock market, which underperformed throughout 2021, has started to rebound first.Since the main influencing factor of A shares in the future is not overseas stock markets, we have to look at the impact of the domestic economy.In fact, the current domestic economic data is not very good, unlike the ECONOMIC rebound in the United States so obvious.China’s economy has started to rebound in the second half of 2020, but now there is a greater risk in the afternoon.Therefore, many people from this point of view, think that the economy is bad, the stock market can not be improved.However, we should note that the stock market will do well if the economy is not doing well. Money is the key.For example, after the outbreak of the epidemic in 2020, money was relatively loose, so the stock market or fund returns in 2020 were relatively good.As it stands now, the latest central bank measure, M2, is 9.8, higher than it was for the whole of last year, and is likely to rise further, back above 10.If you look at the past few years, M2 has a very strong positive correlation with the stock market.In 2017, M2 was above 10 at the beginning of the year, but dropped to the range of 9-10 in the second half of the year, and remained above 9 for the whole year. This year, the market was structural. Although the Shanghai and Shenzhen 300 index rose by 20%, the average return rate of funds was only 10%.The main gainers this year were value blue chips.This is very similar to 2021.In 2018, M2 became more than 8 and the monetary increment was not good. During the whole year, the Shanghai and Shenzhen 300 index fell by 25%.This is an example of a clear lack of capital, causing the stock market to fall.In 2019, the stock market did a little better, but more of it was a rebound from the 18-year crash, not driven by incremental capital gains.In the first half of this year, the economy almost came to a halt. Many industries, many regions or specific enterprises and individuals had to suspend production. Under such circumstances, the economy was definitely miserable.Normally, when the economy is bad the stock market should be bad.But the opposite is true.In early 2020, the country made a decision very quickly, with three RRR cuts, one across the board and two targeted RRR cuts.So from March 2020 to the beginning of 2021, M2 will be above 10.Fueled by a flood of money, the fund’s returns for 2020 were its best since 2016.The biggest feature of 2020 is the very high increment of money.Why is 2021 worse? We need to see a turning point: from March of 2021, the money growth rate will drop to 8.The RRR was cut once in the middle of the year, but it still failed. Then in December, M2 in December and January this year finally stabilized above 9, and I expect it to exceed 10. Therefore, I think this year is likely to be similar to 2020, or at least better than the game of relying on stock capital in 2021.In addition to the positive data on monetary growth, we can look at the retracting data in recent years and look back at the biggest declines in history to get a further conclusion.A lot of people would say, well, it’s different now, it’s very different this time.Then he lists a number of reasons to be pessimistic about the future.I want to share with you the idea that as long as the data is long enough, there is no “this time is different.”Because the time is long enough to include every difference in the past, we can ignore the “difference” in the long-term data.The CSI 300 retreated 30% in 2018.This is the highest in recent years.After that, in 2019,2020,2021, the backtest basically did not reach 20%.It is now closer to 20%, the maximum retracement under normal conditions.The gem index is the same, the gem index retracement calculated as of yesterday 18.4, also close to the maximum in several years.Chinext has been a bit more volatile, with a maximum retracement of 33% in 2018, but since then there have been only a few times when it has approached or barely reached 20%. In other words, it may now be the same as the previous ones, with 20% retracements followed by a rally.Looking at this data, we can be more confident that there is not much room for decline and the probability is not large, so it should be a better choice to continue holding than to sell at this point in time.If current position is lighter, it is an opportunity to start batch slow rhythm to buy actually now.We can also look back at past declines in terms of how much more a-shares will fall.Here’s how the CHINext index has done in recent years, starting from its worst days in late ’18.It went up in the first quarter of early 2019 and immediately fell by about 20%;In March 2020, when the epidemic broke out around the world, the US stock market was shut down for several times, and the GROWTH Enterprise Market fell 20%.Before the Spring Festival in 2021, it rose to a high level and fell again, also accounting for 20%.When a lot of people are buying fund, after hoping to buy it is to rise, all fall with oneself do not have concern, had better be bought in lowest position namely, sell in highest.In fact, reason tells us that we are dreaming, but we are dreaming.Real investment gains good returns, not exactly buy low sell high, but hold, experience a decline and then come up.For example, don’t expect to buy in April 2020 and sell in July 2020.First of all, April 2020 was after the global plunge in March. At that time, people would not dare to buy, just as now everyone is considering whether to sell or not. No one can accurately grasp the low point and dare to buy.More likely, buy in early 2020, ride out the 20% pullback and wait for the rally.The same is true in 2021, with those who bought at the beginning of the year losing a lot in the post-Lunar New Year crash, but by July they ended up making money even after the crash.A lot of times, when we buy a fund, we think we can withstand a 20% drop. Can you?We all know that buying a fund is a long-term investment that can be held for 3 years and 5 years. Can you really hold it for 3 years and 5 years?If the answer to the above question is yes, what is there to be afraid of?