We are always deceived by the market, as it always presents us with unexpected changes.

At the beginning of 2023, when the index stood above 3000 points, various voices believed that the index would bid farewell to the 3000-point mark.

In the middle of 2023, when the index fell below 3200 points, various voices were heard saying that investment opportunities below 3200 should be seized.

At the end of 2023, when the index fell below 3000 points, and even 2900, the market was filled with voices calling for a decisive battle at 2800 points.

The market is changing, and the voices in the market are changing.

But have you ever thought that these seemingly large fluctuations and changes are just a fleeting moment in the long river of time.

The A-share market has been around for more than 30 years, and the changes in this half year are just a small fluctuation around the 3000-point mark in the entire timeline of the A-share market.

It's just that the speed of information dissemination is too fast, and the voice of public opinion is too strong, which makes our emotions change with the market every day.

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From December 19, 1190, to the present,

If you stand at 6124, stand at 5178, and then look at the current market situation.The fluctuations of this year were only over 500 points, with less than a 20% amplitude of oscillation.

However, the structured market conditions have led many people to suffer losses far exceeding this amplitude in the process of chasing rises and selling falls.

That is to say, even if A-shares fluctuate in place, they will cut the "leeks" again and again in the fluctuations.

This is because most investors are actually investing not in the index, but in individual stocks, industry sectors, hot spots, and emotions.

A 10% drop in the index is a significant fall, and a 20% drop can be described as a catastrophic collapse, but when it comes to individual stocks, situations where the value is halved are common.

Therefore, the first thing investors need to learn is to outperform the market.

This is also the reason why it is necessary to study the overall market index and the overall market environment.

Individual stocks are just a sample case among 5,000, while the index represents the overall direction of the entire market.

Many retail investors have been misled into thinking that as long as they buy a bull stock, it can go through the index's bull and bear cycles.

This statement seems correct, but such stocks are extremely rare and very difficult to find.Imagine if retail investors could all find such stocks, then who would the main forces make money from in the volatile market?

The best countermeasure is to understand the cycles and control the risks.

If you can understand the bull market cycle, the probability of outperforming the index is very high; just hold on as hard as you can.

If you can understand the bear market cycle, the probability of outperforming the index is equally high; just try to control your position well.

The key issue is that most investors lose themselves in the market trend, always feeling that there will be a big rise or fall.

The fluctuation of individual stocks, especially those that hit the daily limit, stirs the market's emotions.

But looking at the overall market, catching a daily limit every day, this low-probability event, is actually not for ordinary retail investors.

On the contrary, the situation of being trapped as soon as you buy often happens to retail investors.

Retail investors want to make money, and short-term trading seems to be a shortcut, but in fact, trend trading is the right way.

As the saying goes, make more money when the market is good, and lose less money when the market is bad.Analyzing indices and the market environment is truly valuable and a required course of study.

Do not be distracted by the voices of the market; having the ability to make independent judgments and to correct one's own mistakes in a timely manner is very important and key.

The market is dynamically changing. In the first half of the year, the call for buying below 3200 was correct; in the second half of the year, the call for a drop to 2800 is also correct.

Why these seemingly contradictory voices are correct is because the market has changed.

In the first half of the year, the economic recovery was optimistic, and the entire market was focused on the main line of China's special valuation.

In the second half of the year, the economic recovery was far less than expected, and such a market has seen a devaluation.

From the story of special valuation to the failure of this story, it only took half a year.

This can be seen from various data such as social financing data, loan data, CPI data, overall consumption data, and real estate sales data.

The market's plan has changed significantly because the economic situation is far less than expected.

Among them, the most affected is actually the data of real estate, which can affect all major industrial chains, or the core plate of the economy, and the situation is still worse than imagined.In this broad environment, the funds that were originally bottom-fishing below 3200 points have chosen to cut their losses and exit, which also led to the stock market going down with the trend.

There is also a saying in the investment market, "This time is different from that time."

Never think that the shift of funds is a mistake, as funds are more realistic than retail investors, knowing how to go with the flow, and when it's time to admit mistakes and cut losses, they will admit mistakes and cut losses.

Why do foreign funds want to flee? Because when they entered the market, the predicted direction was completely inconsistent with the current predicted direction.

To put it nicely, it's called a judgment error, the market is not as expected, to put it bluntly, it's being deceived by the market.

If you can recognize this issue, another issue will naturally have an answer.

Why has the market been indifferent to so many policy stimuli, and instead continues to fall?

Because policies represent the expected direction, while data represents the actual direction.

Policies represent predictions, while data represents reality.

Ultimately, the overall trend direction of the market should conform to reality, rather than everyone living in expectations.Returning to today's topic, where is the A-share market now, and what position is it in?

Many voices have proclaimed the early stages of a bull market, a point with which I do not agree.

The so-called early stages of a bull market refer to a situation where the market has formed a clear bottom, but the index has not yet risen significantly.

Currently, the bottom of the index is not yet clear, so how can we talk about the early stages of a bull market?

In the bull market of 2006-2007, the market bottomed out in June 2005, started in December 2005, and accelerated its rise in March 2006, not to mention the cycle of the index probing the clear bottom of 998.

In the bull market of 2014-2015, the market bottomed out in June 2013, started in July 2014, and accelerated its rise in November 2014, not to mention the bottom cycle before the index probed 1849.

The market's bottom requires an unexpectedly low point and a sufficiently long time cycle.

The current market is in a large cycle of fluctuating decline, having experienced about a year of decline, and needs a rebound in the market, but the market is far from the stage of confirming the bottom.

In terms of valuation, the market is in the middle and late stages of a bear market, which means it is not too far from exploring the bottom.It is uncertain whether the market will accelerate its bottoming process, or whether it will rebound first and then undergo a second bottoming, which remains to be seen.

The bottoming referred to here is not at the daily level, but at the monthly level.

After five consecutive monthly declines, a rebound is approaching, and the second bottoming after the rebound is the key period to complete the end of the bear market.

We cannot say that this place is the foot of the mountain; we can only say that it is approaching the foot of the mountain.

We cannot say that this is the early stage of a bull market because we do not know how many small peaks and valleys there are between the downhill and uphill roads.

If we must find a historical benchmark, we can look at the end of 2003, the end of 2012, and the middle of 1994.

We must believe in the laws of cycles because they are natural laws, whether applied to economic cycles or stock market cycles, the situation is almost the same.

The long river of history will not actually remember the decline of 2023, because the index is just a small bearish candlestick.

But I believe that the vast number of retail investors will have a deep impression of 2023, because this year is very difficult to endure.

In 2024, at the time of the transition from the end of the bear market to the beginning of the bull market, the situation may not be much better. As investors, we still need to be fully prepared mentally.A capital market led by financing is indeed challenging when it comes to making money, but since we have come this far, we must be prepared to forge ahead amidst difficulties.