Many people ask me, what are the characteristics of a bull market, and is there a bull market at this position now?

I would counter-question them, if a bull market comes, are you ready?

If there is a bull market now, what do you buy, how much do you buy, how do you buy it, and can you hold on to it?

If you haven't thought through these questions, then what does the bull or bear market have to do with you.

There are also rising stocks in a bear market, and there are also falling stocks in a bull market.

You are always thinking about bull or bear markets, but you haven't even thought about what to buy, then you are far from making money.

So, what you need to do is not to judge whether the bull market has come or not.

Advertisement

What you need to do is to have your own trading strategy in any kind of market.

Because what really makes you money is never the bull or bear market, but your trading strategy.The magic of the stock market lies in the fact that no one can accurately predict it, but we can judge the position and stage the market is in. All trades are matched trades, which means the bulls and bears are theoretically evenly matched. However, they have different ideas about trading and the methods they adopt.

For example, the bulls want to buy low and do not take the initiative to attack, so the stock price will slowly fall. The bears start to cherish the chips in their hands and are unwilling to sell at a low price, so the stock price will slowly rise. The bulls and bears are in a dynamic balance, just like bull and bear markets, which alternate and change continuously.

However, valuation can tell us the level of risk at the moment and the current position. But this can only be applied to the overall market, not to a few individual stocks. There will always be many stocks that go against the current in the market, because capital needs to eat, and they need to find topics.

Structural bull markets will exist for a long time, which requires investors to maintain a higher sensitivity to the market.For a considerable period in the future, investors who cannot grasp the main trends of the market will find it difficult to make money.

Some things are only known to be right or wrong in hindsight.

Just like now, whether it's a bull market or a bear market, there is no right or wrong.

Because we are all waiting for the market to provide the answer.

But the opportunities to make money in the market do not appear only after the answer is revealed.

It's like when ordinary retail investors understand the bull market, it is often a peak.

Even if it's not the peak, it's a sub-peak, the opportunities to make money are becoming fewer, and the risks are also increasing.

To make money, it requires a certain degree of foresight, and foresight is something that is prone to errors.

The vast majority of investors are relatively subjective when making predictions, which is a commonality.So, many retail investors either make no mistakes or make big mistakes, such as being strongly bullish at the end of a bull market.

When they realize the outcome, it is quite normal to have a paper loss of 30%-50%.

In an unknown game, how to control risks should be the first priority.

Different mindsets will see completely different things.

Facing a possible bull market, another key point is the mindset, which is really very important.

The valuation and market position mentioned earlier correspond to a cycle.

The market is always in a cycle of valuation.

Some investors follow the valuation, and their mindset is completely different from that of ordinary investors who chase rises and cut losses.

Value investors are happier when the market falls.Trend investors are only happy when the market is rising.

Therefore, everyone is happy to make money in a bull market, but the mentality is completely different when facing a bear market.

Optimists become happier as the bear market falls, while pessimists become more distressed as it falls.

The attitude towards the bear market determines the possibility of making money in the bull market.

Finally, from different perspectives, look at the current market and draw several conclusions.

1. From the perspective of valuation, the market has the conditions for a bull market.

The so-called bull market launch must have low valuation as a necessary condition.

Because if the valuation is not low enough, there is not enough space, the amount of capital that can be attracted is not much, and there will be no bull market.

The current market valuation is relatively low, which is a condition for forming a bull market.However, being lower and even lower, or the lowest, has no boundaries.

It is very likely that there will be a lower valuation range, but whether this will happen is unclear to anyone.

2. From an emotional perspective, the market has the conditions for a bull market.

In terms of sentiment, the market actually has the conditions for a bull market.

All bull markets are born out of extremely pessimistic sentiments.

When the whole market has no confidence, it is precisely the time when the possibility of forming a bull market is relatively high.

However, a bull market itself is a reversal of sentiment.

That is, the emotional reversal brought about by a continuous rise, which requires a process.

The saying "buy when no one cares" tells us that the sentiment needed for a bull market is actually a collective pessimistic sentiment.

998, 1664, 1831, 2440, are all the same situation.Emotions follow the ups and downs of the market, and the nadir of emotions is precisely the cradle of a bull market.

3. From a policy perspective, the market has the conditions for a bull market.

Regarding policy, there is not much to say because everyone has seen it.

Although the underlying policies, such as IPOs, have not undergone any fundamental changes, the determination to protect the market is definitely there.

Looking at the policies on dividends and shareholding reduction, most of the market's problems have been resolved.

Of course, there are also some core issues that have not been resolved, such as fraudulent listings, financial inflation, illegal shareholding reduction, whether there should be more severe punishments, and so on.

The foundation of policy is the basis for guiding funds into the market, and the confidence of funds comes from policy.

4. From a funding perspective, the market has the conditions for a bull market.

Many people say that the market is short of money, but the market has never been short of money.

The entire market is implementing a loose monetary policy, and the loan interest rates have been reduced to 3.5%, 3.2%, and even 2.8%.The deposits in banks amount to hundreds of trillions, all of which are funds.

The market often sees transactions in the tens of trillions, is it really short of money?

The market is not short of money, but it lacks the effect of making money, so funds are unwilling to enter the market to do more.

Therefore, the market has the funds needed to drive a bull market, what is lacking is confidence, it is just the reason to let the funds enter the market.

5. From the perspective of time, the market does not have the conditions for a bull market.

This is the only condition that cannot be confirmed at present, the time is not short enough.

The starting point of a bull market is a long-term pessimistic and low valuation range, but now it has not completely reached this point.

The starting point of the previous bull markets should have a bottom period of at least half a year to a year, but the A-share market has broken through 3,000 points in the last 3 times, and the time is only a few days.

It is necessary to know that the layout of the real main funds requires a period, and a few days are definitely not enough.

That is to say, if the market can continue at a low level for a long period, it will have the foundation to truly start a bull market.Without chips, who will boost the stock price for you? Capital is not for charity.

Many people fail to see this point, which is why there is a problem here, and this issue is very critical.

The conditions needed for a bull market are indispensable.

The market is mostly volatile most of the time, and the reason why bear markets are long is that we are accustomed to including volatility in bear markets as well.