"A-Share Bull Market Ends: China Concept Stocks Plunge 5.5%, Trapping 800B Yuan"
Stock market plummets, 800 billion yuan of funds trapped, how should investors save themselves?
At the beginning of 2024, the Chinese stock market gave investors a "baptism by fire". Both A-shares and Hong Kong stocks plummeted sharply, catching people off guard. What exactly is going on? Is another stock market disaster imminent?
A day of panic: The stock market plummets, and investors suffer heavy losses
On January 2, A-shares opened and fell all the way down, closing with the Shanghai Composite Index plummeting by 5.5%, setting a record for the largest single-day drop in recent years. Hong Kong stocks also took a big dive, with the Hang Seng Index plummeting by more than 4%. The plummet on this day made countless investors panic.
According to statistics, on just this day, as much as 800 billion yuan of funds were trapped, with A-shares accounting for 600 billion yuan and Hong Kong stocks for 200 billion yuan. What does this mean? In simple terms, it means that a lot of people's money has been lost, and the loss is not small.
An old stock investor, Mr. Wang, who has been engaged in stock investment for many years, lamented: "The savings I have accumulated over more than a decade have evaporated by one-third in one day, and this feeling is even worse than eating a fly."
Advertisement
Multiple factors overlap, why did the stock market suddenly collapse?
So, what caused this stock market plummet? Some experts believe that there are mainly the following factors:
1. Global economic uncertainty has intensified. The repeated COVID-19 pandemic and geopolitical risks have brought significant pressure to the global economy.
2. Sino-American relations continue to be tense. The game between the two major powers has had a significant impact on the capital market.Domestic economic data falls short of expectations. Although the economy recovered somewhat last year, some data still fell short of expectations, causing investors to worry about the prospects for future economic growth.
The most critical point that many people believe is the insufficient policy support. A securities analyst, Xiao Li, said: "The market has been waiting for a long time for the rescue policy, but it has not been introduced, which has made many investors lose patience and confidence."
Investors' mentality collapsed, and market sentiment deteriorated sharply
With the sharp drop in the stock market, investors' mentality also collapsed. On a stock forum, a netizen posted: "I originally thought that I could make some money this year to buy a house, but now it seems that I can't even afford a small dilapidated house."
Another investor said: "I think I may not be suitable for stock speculation, or I'd better deposit the money in the bank, at least I won't lose money."
The spread of this pessimistic sentiment further intensified market panic, forming a vicious cycle. As a senior investor said: "The market is like this, when it rises, everyone thinks it will keep rising, and when it falls, everyone thinks it will keep falling."
Expert advice: Rational view, long-term investment
What should ordinary investors do in the face of such a market environment? Some experts have given advice.
The famous economist Zhang San (pseudonym) believes: "The fluctuation of the stock market is normal, and investors should not be swayed by short-term rises and falls. It is necessary to establish the concept of long-term investment and choose high-quality companies for investment."
Another fund manager, Li Si (pseudonym), suggested: "It is possible to consider diversified investment, and not to put all eggs in one basket. In addition to stocks, it is also possible to allocate some bonds, gold and other assets."Of course, there are also those who hold different views. A well-known financial blogger wrote on Weibo: "Now that the stock market is so poor, it might as well put the money into buying some government bonds, at least to preserve the principal."
What about the future trend? The market is highly divided.
So, how will the stock market go next? There is a great divergence in the market regarding this.
Some people believe that this is just a short-term adjustment, and there will still be room for growth in the future. Their reason is that the long-term positive fundamentals of China's economy have not changed, and with the introduction of various favorable policies, the market will eventually warm up.
Others hold the opposite view, believing that the bear market may have just begun. They worry that if the economic growth continues to slow down, the stock market may fall further.
There are also some people who maintain a neutral attitude, believing that the market may fluctuate at a low level for a while before a clear direction emerges.
In any case, the sharp decline in the stock market this time has sounded an alarm for us. Investing has risks, and entering the market should be done with caution. For ordinary investors, the most important thing is to allocate assets reasonably according to their actual situation and not to pin all hopes on the stock market. After all, life must go on, and we cannot be swayed by the ups and downs of the stock market.