After hitting the 3000-point mark, many investors have been troubled by the question of how to choose the right stocks to invest in. The dilemma of whether the opportunities lie in large-cap stocks or small-cap stocks has perplexed numerous investors.
However, this is not really a problem because both large-cap and small-cap stocks will rise, but the increase in large-cap stocks will definitely be less than that of small-cap stocks. In terms of volatility and profit-making effect, small-cap stocks offer more opportunities.
But when it comes to risk-reward ratio or stability, large-cap stocks may be more suitable for retail investors. The fundamental reason why retail investors are still entangled in the choice between large-cap and small-cap stocks is that they have not yet determined their stock selection strategy.
Once a more complete investment logic and corresponding stock selection system are formed, it will definitely not be a problem of choosing between large-cap or small-cap stocks. The stock selection criteria corresponding to your trading system directly determine whether to choose large-cap or small-cap stocks.
Advertisement
This means that there is no such thing as large-cap stocks being better or small-cap stocks being better; the most suitable one is the best.Additionally, the definition of large and small tickets is also crucial.
What is considered a large ticket, and what market value is considered a large ticket in billions, what is a small ticket, and what market value is considered a small ticket? There is no absolute standard for definition.
So we can first set a standard.
For example, those with a market value of more than 50 billion are called large tickets, those between 50 and 500 billion are called medium tickets, and those below 50 billion are called small tickets.
Generally speaking, large tickets have a high market value, and the space for increase will be smaller.
The market value of medium tickets is moderate, and the fluctuation range is relatively large, so the space for increase will also be relatively large.
Small tickets have a very small market value, which is conducive to speculation. The leaders of short-term surges, including demon stocks, all come from small tickets.
In plain terms, each has its own strengths, but there is still a big difference in essence.
This difference is not just a matter of investors' stock selection preferences or trading strategies, but also involves the style of the entire market.
1. Large market value stocks: The cornerstone of investment.From the original SSE 50, CSI 300, and CSI 100, to the current A50.
Large-cap stocks are being redefined time and again.
Do large-cap stocks have opportunities? Certainly, but it's hard for them to make a big impact in a "bear market" due to insufficient funds.
Of course, it's also quite normal for the leaders of large-cap stocks to double, such as China Mobile, which has indeed doubled.
So, don't think that large-cap stocks have no opportunities; they can steadily climb for a long time, bringing you unexpected returns.
Large-cap stocks belong to the cornerstone stocks, with the first advantage being low risk.
How did the 3000-point position come about? It was still supported by large-cap stocks.
After 3000, will large-cap stocks take a break? It's not entirely like that, but most of them only play a supporting role.
There are definitely not many that can stand out among large-cap stocks.
Large-cap stocks are more like a stable income target, like the A50, which is definitely safe to outperform the Shanghai Composite Index, but the expectation for excess returns should not be too high.2. Mid-cap stocks: The core of the future.
Mid-cap stocks are the core of the market.
In the last bull market, most of the large-cap stocks were mined from mid-cap stocks.
Especially companies with a market value of 10-20 billion, are the favorites of large capital.
There have been many listed companies in the A-share market that have increased by 10 times or 20 times, and then returned to the starting point.
These listed companies all started from a market value of 100-200 billion for speculation.
Why is this market value of companies the core of the future, there are several reasons.
First, listed companies with a market value of 100 billion often have certain core technologies.
These listed companies do not rely solely on concepts to maintain a market value of 100 billion, most of them rely on some real skills.
Second, listed companies with a market value of 100 billion often occupy a certain position in the niche track.Once the niche track explodes, these companies will instantly become the pigs on the wind, taking off directly.
The first batch of high-quality companies have already grown into large companies with a market value of hundreds of billions or even trillions. The new generation that will take over these companies will be born among these medium-sized market value companies.
Technologies with a market value of tens of billions, coupled with a large number of orders bringing profits, should not be a big problem for a market value of hundreds of billions.
Investment opportunities have arisen directly with this trend.
3. Small market value stocks: The core of speculation.
Small market value stocks are often the favorite of speculators because the plate is small and very easy to speculate.
Short-term fivefold or even tenfold stocks are mostly small market value stocks.
However, small market value stocks are often some little-known listed companies, with more crows and fewer phoenixes.
But when speculating, they are very easy to be mined by speculators.
Therefore, most of the thematic hotspots are looking for small market value companies as the leader.In all market trends, the ones with the largest gains are definitely small-cap companies.
However, the overall increase in small-cap companies varies in different market trends.
Take this round of market trend for example, there are more opportunities for small-cap companies, which is because before the market started, micro-cap stocks experienced a sharp decline, making small-cap stocks very cheap.
With low prices and small market capitalization, it is natural that some will be targeted by capital.
Once a listed company has a topic that is related to hot spots, there is a reason for capital to be speculative.
Short-term speculation does not need to verify any performance, as long as there is capital to take over after the speculation, it is suitable for a short, flat, and fast market trend.
If it is really the foundation of a bull market, it is definitely blue chips that lay the foundation, but if it is just a market repair and rebound, then small-cap stocks will naturally take the lead.
Large, medium, and small-cap stocks each have their own characteristics, and in any market trend, they are indispensable, it's just that the market style and preferences will be a bit different.
The 3000 point mark in this round of market trend is also a bit different from the previous 3000 point mark.This round of market trend has two characteristics.
1. It is still a game of existing volume.
Important things need to be repeated several times.
There is no real increase. There is no real increase. There is no real increase.
It's not that there is no increase, but the increase is not substantial.
Supporting without lifting implies that after the market is inflated, it is still a situation of mutual shearing of leeks.
2. It is the "meal" market for 2024.
This round of market trend is destined to be the "meal" market for 2024. Once the speculation is over, the subsequent situation will definitely be worse.
The macro environment has not had time to be repaired, and creating financial risks is even more unrealistic.
After this round of market rise, there must be a downward correction.
(Note: "leeks" is a slang term in Chinese stock market referring to retail investors who are often 'sheared' or taken advantage of by larger, more informed investors. "Meal" market is a metaphor implying that the market is being used to 'feed' or benefit certain parties, usually at the expense of others.)So, capital must seize this window of opportunity to quickly complete the market trend, making as much profit as possible.
I don't know how many people can understand the meaning of the above two characteristics, as many things cannot be fully explained.
For capital, at this position, how high the market can rise actually depends on the sentiment of retail investors.
If retail investors are confident and willing to take over, the market would love to push the index to the sky.
If there is no increase in the direction of retail investors and no increase in the main force, the market trend cannot go too far, and it still needs more time to continue to precipitate.
The precipitation of chips is the foundation of the market trend, and it is actually the essence of stock trading. Whoever has the chips in their hands will consider their own interests.
Comments