The current market trend began on September 24th, when the heads of the central bank, the financial regulatory authority, and the securities regulatory commission announced a series of significant policies at a State Council press conference, thereby initiating this major market movement. The policy bottom coincided perfectly with the market bottom. Prior to the press conference, the market sentiment was extremely pessimistic, with the Shanghai Composite Index breaking below 2,700 points, falling to around 2,600 points, close to the market low before the Spring Festival, forming a double bottom pattern. During the market doldrums, many investors were even bearish down to 2,000 points. At that time, on one hand, I called on everyone to hold onto quality chips and not be intimidated by short-term market adjustments, because the more depressed the market is, the more prominent the investment value of good companies becomes, and the greater the investment opportunities are. If one can hold on until the market trend arrives, it will bring significant excess returns. As Mr. Lin Yuan said in his speech at Peking University's National Development Research Institute, one must now wait patiently like a turtle, waiting for the market trend to arrive. On the other hand, I also actively called on relevant departments to use the interest rate reduction cycle opened by the Federal Reserve on September 18th, actively promoting fiscal and monetary policies to stimulate economic growth, thereby driving the market trend to start. A prosperous capital market is of great significance for stimulating consumption and can directly drive consumption growth. At the same time, the Federal Reserve's interest rate reduction will lead to a decline in the US dollar index and an appreciation of the renminbi.

In fact, since the expectation of the Federal Reserve's interest rate cut began to form, the renminbi has undergone a rapid appreciation against the US dollar, with the renminbi-US dollar exchange rate once breaking below 7. It is expected that the Federal Reserve will continue to cut interest rates 3 to 4 times next year, which means that the renminbi will continue to appreciate against the US dollar next year. The expectation of renminbi appreciation will, on the one hand, attract foreign capital inflows into renminbi assets to obtain exchange gains; on the other hand, it also provides the central bank with greater policy space, allowing it to focus more on stable growth, achieving this goal through interest rate cuts and reserve requirement ratio reductions.

The Federal Reserve's interest rate cut has actually provided us with a good policy window, and we have seized this opportunity. Several departments jointly issued a series of significant policies, completely reversing investors' expectations of economic growth, including many investment banks and investment magnates on Wall Street who have said that the series of policies introduced by China far exceeded expectations. The capital market's response was also very strong, with market turnover continuously increasing. Roughly estimated, the total turnover in the dozen or so trading days from September 24th to now has reached about 20 trillion. The largest single-day turnover occurred on the first trading day after the National Day holiday, reaching about 3.5 trillion, setting a historical record. The 2.3 trillion daily turnover record set during the last bull market at 5,000 points in June 2015 has been easily broken, and recently there have been several trading days with a daily turnover of about 3 trillion. This indicates that after the introduction of policy benefits, the change in investor expectations has driven many investors to increase their positions, and also driven the movement of deposits.

During the holidays, the amount of funds transferred between banks and securities companies increased significantly, and during the National Day holiday, many securities firms worked overtime, even going to rural markets to help investors open accounts. According to statistics, more than 1 million new stock accounts were added during the National Day holiday. For the first time, everyone felt that the holiday was too long and hoped to start trading as soon as possible. During the National Day holiday, the Hong Kong stock market rose sharply on three of the four trading days, and Chinese concept stocks also rose sharply. Therefore, this round of market trend should be the result of the resonance after the policy bottom and the market bottom overlap, and the increase in turnover also indicates that this round of market trend is not a short-term trend, but has opened a long-term trend.

The second trading day after the National Day holiday, the market fell sharply, and it was a sharp decline with increased volume, which made many investors worry whether the market trend was over. My view that day was that the A-share market would usher in a second wave of upward market trend, and this view topped the Weibo hot search list, occupying the hot search list for seven hours, with a reading volume of 110 million, showing people's strong expectation for the market to rise. After four years of decline, the prices of many stocks are actually less than half of the high point, and until today, the prices of many stocks are still the case, and some are only 30% to 40%. Therefore, it is obviously inappropriate to start talking about market bubbles at this time.

At present, many high-quality stocks are still seriously undervalued, and many investors are optimistic about the market. The huge turnover of this round of market has actually successfully realized the turnover of most chips. First, institutional investors hold stable stocks, and since the public fund position has been high before, there is not much room for increasing positions. This time, the fund people have not taken large-scale actions, mainly it is the stock people entering the market, and the fund subscription volume has not increased significantly. Usually, fund people will subscribe to funds and enter the market in large quantities after the stock people enter the market and the market trend rises again.

The market rise in the past two weeks was mainly driven by ordinary investors, including new stock investors entering the market and old stock investors increasing their positions. Among the old stock investors who were trapped for three years, some took the opportunity to take profits and sell after breaking even, thus realizing a full turnover of chips. Therefore, it is a normal phenomenon for the market to experience a sharp decline during a sharp rise. But whether it is rising or falling, the market turnover has always been at a high level, which also shows that investors' willingness to trade is very strong.

Rapid rise and sharp decline are one of the characteristics of a bull market, which is also one of the views I rushed to the hot search yesterday. The characteristic of a bear market is that the market turnover shrinks sharply, there are few transactions between bulls and bears, the market continues to shrink, and individual stocks fall. In a bull market, the turnover increases sharply, there is a big difference between bulls and bears, the game is fierce, and even there are sharp rises and falls like a raging fire, which exactly reflects that the market has completely reversed the previous low trend and entered a trend of increasing volume and rising prices. The market trend has been reversed, and investor confidence has been boosted, which also lays the foundation for the next step of the market trend to deepen and a second wave of attacks. Therefore, everyone must be firm in confidence and patient.

At present, many high-quality stocks and funds are still at a low level. The first wave of the market was a rapid rise driven by emotions, and it has now come to an end. In the future, the market will welcome the second wave of rises through sufficient turnover and shocks.相对来说, the market trend will be more stable, fluctuations will be reduced, and there will still be many opportunities to make money. Moreover, market differentiation will become a characteristic in the future. During the first wave of rises, almost all industries and sectors rose, but the increases were different. However, in the second wave of rises in the future, differentiation will occur, and good industries representing the direction of economic transformation and good companies in the industry will lead the rise, while some poor companies may not rise and may even fall.From the perspective of economic transformation, the directions that will primarily benefit from China's future economic transition are mainly in three areas. The first is the consumer sector. China has the largest population and the largest consumer market in the world. Branded consumer goods have enduring vitality; they are supported by performance and have brand value, especially during times of consumption downgrade and a decrease in residents' income, where the competitiveness of branded consumer goods becomes even stronger. Non-leading consumer companies may face losses and even be eliminated from the market. Good companies will have a higher market share, for example, consumer blue-chip stocks such as branded baijiu, traditional Chinese medicine, and food and beverage will see a rebound in valuation and good performance, which are worth long-term attention.

The second major direction is new energy. The replacement of traditional energy by new energy is an inevitable trend. China does not have an advantage in the field of traditional energy; it is a country lacking in oil and gas but rich in coal, with an oil import dependence of over 70%. China has a significant advantage in developing new energy because it has vast deserts and Gobi in the west, where a large number of photovoltaic power stations and wind power stations can be built, and it also has a long coastline suitable for offshore wind power. Vigorously developing new energy can not only free itself from dependence on traditional energy but also bring the benefits of energy saving, emission reduction, and carbon reduction, which is conducive to achieving the dual-carbon goals. In the past three years, due to the rapid expansion of production capacity in industries such as new energy vehicles, lithium batteries, and photovoltaics, price wars have led to a double blow of declining performance and valuation in the new energy industry, causing stock prices to plummet significantly. Opportunities arise from falls, and now, whether it is new energy vehicles, lithium batteries, or the photovoltaic industry, they have gradually passed the worst times and have reached an inflection point. The rebound in lithium prices and photovoltaic module prices indicates that there are opportunities for industry reversal. This is a good time to seize the opportunity to invest in clean energy funds.

The third direction benefiting from economic transformation is technology and the internet. China's investment in technology is gradually increasing. Although leading technologies such as the internet and AI were not originated in China, our advantage lies in the large consumer market and strong application end. Although the internet was not invented by us, we have produced some internet giants. Similarly, our development in AI is not the most advanced, and there is still a significant gap in the field of chip semiconductors compared to the United States. We need to increase R&D investment and overcome difficulties, but we can increase applications and produce a batch of AI leading enterprises like those in the internet era.

As this round of market conditions gradually transitions from the first stage to the second stage, everyone should carefully select good industries, good companies, and good funds based on the fundamentals. The recovery of economic growth requires time to verify, and it is still difficult to see significant changes in economic data in the short term. However, the stock market often runs ahead of the economy, usually reflecting economic changes about half a year in advance. As long as everyone expects the economy to rebound next year, policies will gradually be implemented, and policy strength will continue to increase, the capital market will show a relatively strong trend in advance. Moreover, the more the real economy slows down, the more funds will look for opportunities in the capital market.

What we are facing now is actually the opportunity for a major transfer of residents' savings. In the past, the direction of the major transfer of residents' savings was mainly the real estate market, which also gave birth to China's 20-year golden investment period in the real estate market. Many people have widened the gap with their surroundings by buying houses. However, the real estate market in China has now reached an inflection point, with house prices in many cities falling sharply, and even the down payment has disappeared. The transaction volume of the real estate market has also decreased significantly. Although the purchase restrictions in second and third-tier cities have been completely lifted, and Guangzhou in first-tier cities has also completely lifted purchase restrictions, it is expected that Shenzhen, Shanghai, and Beijing may also announce the lifting of purchase restrictions one after another. However, it is impossible for the real estate market to return to its previous high-speed development state. In the future, only houses with strong demand and in core areas will have greater competitiveness, and house prices will continue to rise. However, most cities have an oversupply of houses, coupled with a negative population growth in the future, the demand for houses will decrease. Therefore, the direction of the major transfer of residents' savings in the future must be towards the capital market, by buying high-quality company equity to become shareholders, or by buying funds to indirectly hold the equity of listed companies.

In the past four years, due to the sluggish real estate market, the decline in the stock market, and the difficulties in the development of the industry, residents' savings have increased by 60 trillion. Now, China's residents' savings have reached about 150 trillion, and these residents' savings can only obtain low returns of 1% to 2% in bank accounts and have been waiting for opportunities. The bull market triggered by this round of policy stimulation has directly stimulated the major transfer of residents' savings. Many customers, with large deposits and large certificates of deposit expiring in a few months, give up interest and withdraw in advance to find opportunities in the stock market, which is a cash withdrawal. Therefore, the major transfer of residents' savings in the future will bring a continuous increase in funds to China's capital market.

However, from historical experience, the proportion of individuals making money from stock trading is very low. Entering the market by buying funds is relatively more reliable. Funds belong to professional investment, with fund managers helping you to select good stocks, and generally, junk stocks cannot enter the fund's stock pool. Second, funds are diversified investments, usually buying a basket of stocks instead of a single stock, so the risk of individual stocks is greatly reduced. Third, this round of the market may once again reproduce the phenomenon of many investors adding leverage, just like in 2015, I have always opposed everyone from adding leverage. However, some people still take risks, and once the market rises too fast, or generates bubbles in the future, it may lead to a de-leveraging stampede. Of course, we should try our best to avoid this situation. When the market experiences concentrated selling, the advantages of funds are highlighted. If you hold stocks, they may continue to fall and not be sold, but funds can be redeemed when the holding target falls, as long as there is no huge redemption, applications during trading hours can be calculated according to the closing price of the day's fund net value, so the subsequent falls have nothing to do with you. This is also the advantage of fund investment compared to stock investment, that is, its liquidity has always been relatively good.

Whether it is stock investment or fund investment, the most important thing is to establish the correct investment philosophy, adhere to value investment, and not be disturbed by some short-term hot spots. We should regard the capital market as an equity investment place and not chase rises and kills falls. We believe that the subsequent policy strength will further increase. This Saturday, the Ministry of Finance will hold a press conference to make specific arrangements for the next fiscal policy, which is expected to stimulate investment and consumption through the issuance of large-scale national bonds, and to further boost investors' confidence in future economic growth and the performance of the capital market. I hope everyone seizes this opportunity of the market, and truly achieves wealth growth by allocating high-quality stocks or high-quality funds. For investors who have lost money in stocks or funds in previous years, they should also seize this opportunity to make a beautiful comeback.