In the lead-up to the National Day holiday, the A-share market has seen a dramatic surge, sparking conversations about stocks in every corner of society. As the dust settles just a week later, reactions among investors differ considerably. Some have identified a personal connection with the “art of trading” and opted to become long-term value investors; others, faced with the market’s volatility, are left perplexed and have exited before even stepping in; meanwhile, a few have jumped on board and are continually testing the waters with their “experience cards.”
Reporting from Jinan, Li Mengyao, Guan Yue, and Shi Shengqi share insights into this current market climate.
Swings Leave Investors Unsure
“I’m definitely stuck after today’s drop; I bought this morning,” Wu Chu texted a friend while walking on October 15. “Everyone is discussing the stock market. It seems like it’s on everyone’s mind.”
At 28, Wu operates a small company and felt a surge of excitement about the thriving A-share market before the National Day holiday. He noticed even his friends, who knew little about trading, were eager to test the waters, prompting him to open a trading account on the first day following the holiday.
“The brokerage advised me that I couldn’t trade on my first day, yet I kept hearing about stocks hitting their ceiling prices. Watching stocks rise while I couldn’t buy was frustrating,” Wu reflected. However, a significant drop followed shortly after, akin to a rollercoaster ride.
On the other hand, a fellow investor, Xiao Gu, hurriedly transferred some savings into his trading account on the morning of October 7. He bought several stocks right at their peak but experienced frustration when he couldn’t complete his purchases until an hour after the market opened. “I felt like I was racing into the market. Nobody wants to miss out on a good opportunity,” Xiao said.
However, the week following National Day revealed a stark contrast to the pre-holiday optimism. Over just four trading days, the Shanghai Composite Index fluctuated significantly, dropping almost 500 points from 3674.4 at Tuesday’s opening to 3187.99 by Friday.
As emotions mirrored the market’s ups and downs, Xiao noted, “The market opened low over the last few days, then bounced back. Just when I thought I grasped the trend, it flipped again this afternoon.”
New investor Wu shared a similar sentiment as he remained hesitant to commit after opening his account over a week ago. Headlines about losses, like “Young investors losing 320,000 yuan in four days,” weighed heavily on him. “I’ve been researching, but the stock market is truly perplexing,” he admitted.
Choosing to Cash Out
Instead of jumping into risky investments, Xiao has a bit more experience. Ten years ago, while in college, he entered the market with 5,000 yuan he saved from summer work, adopting a casual mindset. “At that time, I didn’t have a precise stock-picking strategy, mostly following trends and averaging down. I made a bit of money,” he recalled. Yet in early 2016, a market downturn wiped out his gains, forcing him to exit with disappointment.
During the National Day break, while Hong Kong’s Hang Seng Index surged by 9.3%, Xiao felt compelled to return to the market. He opened a trading group chat that he had long muted.
This time, with 60,000 yuan freed up from foregoing decent returns on solid funds, he decided to invest again. “I hesitated to withdraw from my funds when A-shares were climbing, but I regretted it during the holiday. After the break, I quickly initiated a transfer to channel that money into stocks to recoup my previous losses.”
Wu prepared 50,000 yuan for trading after thorough discussions with his wife, who initially opposed the idea due to perceived risks. “I had considered entering the market before, but every time I brought it up, she vetoed it. This holiday, facing a booming market, I approached her again, and to my surprise, she agreed, even contributing 20,000 yuan,” Wu explained.
Although trading was paused over the holiday, he used the time to research, join stock trading groups, and study relevant stocks. Over the past couple of weeks, his efforts have been intense; he now spends dinners, commutes, and even breaks watching financial videos—a stark change from his prior habits of gaming or watching comedy clips.
However, neither Wu nor Xiao anticipated that the market would shift again. On Xiao’s second day of trading, he faced a loss of nearly 1,000 yuan; by the third day, his account had shrunk by 25%, and by the fourth day, he managed to bounce back. After seven trading days, he recorded a loss of over 2,000 yuan, paralleling the emotional rollercoaster of the stock fluctuations.
Finding Calm in Chaos
For Wu, the market’s volatility has made him more cautious. “After witnessing the fluctuating trends, many investors began to doubt their positions,” he observed. Nevertheless, it’s important to note that compared to the low points of September 13, both the Shanghai and Shenzhen indices still show gains of 19% and 26%, respectively.
Analysts hint that the current upswing is characterized by rapid information dissemination through new media and reflects an influx of excess savings into the market. Over two weeks of trading, the Shanghai market’s transaction volume skyrocketed from around 25 billion shares to a peak of 1.314 billion shares, surpassing historical daily trading volumes from previous bull markets.
On November 12, the State Council’s press conference outlined a series of new policies aimed at bolstering the economy. “These initiatives give us a lot of confidence,” Xiao remarked, expressing a clear sense of preparedness this time around. “I’ve resolved to hold on longer this go-around and won’t exit hastily. This decision was made with careful consideration, and since it’s only a small portion of my personal funds, there’s a significant margin of safety.”
Conversely, Wu admitted that the recent bull market initially made him overly optimistic, but he has since recalibrated his mindset. He shared that among his peers, many are new to trading, with some having managed to earn back 2% of their investments, while others are still struggling to break even.
“This reflects the reality of the stock market,” Wu concluded, noting his shift from a mindset of “assuming I can profit just by buying” to one of active learning. He remains cautious, ready to learn, and aware that once he commits, he won’t regret his decision.
Experts posit that the recent adjustments in the A-share market may actually be beneficial, serving as a correction to previous rapid movements. The indiscriminate phase of the bull market has concluded, presenting a new test for investors in stock selection, industry analysis, and market timing. Industry insiders also caution that the stock market carries risks, and one should enter with caution.
(Note: The names Wu Chu and Xiao Gu are pseudonyms.)
