Category: Money tips Release Date: 2006-07-14
"Stock market risk, the intervention need to be cautious" is all very familiar with the stock market risk warnings. Not long ago the connection with the stock high, some investors have become adapted this phrase, "the stock market without risk, the market should be bold." Yes, it is a bull market, but the bull market there will be no risk? To answer this question, let us first take a look at China's Taiwan stock market history.
Taiwan's weighted index from 1987 onwards, about 1,000 points. Coincidentally, it is close to A-shares at the end of 2005, after a four-year bear market on the Shanghai index level. 9 months later, Taiwan's weighted index reached a high point of 4,673.14, while the three months after adjustments, down to 2,239.80 points, down 53% or so. The next 9 months, the index increased sharply again, to reach 8,789.78 points, and then drop in three months fell to a low of 4,873.18, a decrease of 45%. One year after the index reached a high point of 12,495.34 (In the past 17 years, never failed to go beyond this level), while the subsequent 8 months fell sharply in October 1, 1990 to reach 2,560.47 points. The end of 1990, Taiwan's weighted index rebounded slightly to 4,530.16 points. From the view of the situation in Taiwan from 1987-1990-year period there were two three-bubble in a three-month adjustment, the adjustment is in about 50%. After these two adjustments, and both appeared in 9 months up drastically, but the last crash in 1990, basically makes the most of Taiwan's retail investors go bankrupt.
Reviewing this history, does not say that the A shares will follow the trend of Taiwan 20 years ago. The Mainland and Taiwan is different, history never truly repeats itself, but we can learn from history. We can see: a bull market, stock prices are not all the way up, but rather up and down, there are fluctuations and callbacks, and sometimes callback rate fluctuations and very large.
Stock Market There are three facts we must note that:
First, a complete bull market cycle is unable to accurately predict in advance, and a bull market cycle, there will be a few adjustments and adjust the amplitude and time is also no way to accurately predict in advance, and uncertainty is one of the basic characteristics of the securities market, It is also the securities market lies its charm. This so-called predictive analysis is merely an illusion, forecasting results of the analysis results are consistent with the market operation is only a coincidence;
Second, investors weaknesses that greed and fear, the investment process in the chase with the universal tendency to sell into the psychological characteristics, different investors can only be overcome to some extent, the market as a whole can not be beyond the impact of this vulnerability ;
Third, any rational economic man of the investment is time-limited, because human life is limited, people always always have a variety of consumer and financial demands.
To ask ourselves: the bull market would continue to rise in stock prices do? We can accurately predict in advance when the bull market end? We can know in advance that the market will adjust and fine-tune the extent and time? We can completely overcome the greed and fear, chase sell into two kinds of weaknesses? We can do no limit to extend the investment period? The answer is no. So how can we ensure that its own is not that at about 8789 on the Taiwan stock market to buy, sell near 4873 people? Then come to the conclusion may make us feel very disappointed that: Whether it was you or I have a chance, but the bull market are bound to have investors lose money.
This is a sound a little depressing conclusion, but will once again confirmed by the market. Then, as an ordinary investor should be how to do? In fact, China Securities Regulatory Commission Chairman Shang Fulin has told us: "do need to fully understand the risks, investors, especially the vast number of people to our own asset management acts, do not believe in the so-called market news. For the ordinary people, the stocks should be a little bit 'idle money, leisure time and Xian Xin's three leisure realm'. "
Recently, regulators have repeatedly stressed the need to do a good job investor education, the current work is now in an orderly manner. In fact, in this work, ordinary investors should take the initiative to participate in in-depth understanding and knowledge of investment risks, enhance self-awareness of risk, so that a moderate investment, rational participation, bearing in mind the "stock market risk, the intervention need to be cautious."
