Buy when no one cares, and sell when everyone is enthusiastic
I saw this title today in Ding Da’s official WeChat account.
Buy when no one cares, and sell when everyone is enthusiastic.
Now should be the time when no one cares.
I started regular investment in August 2019. I reached the peak of returns twice, in January 2021 and July 2021 respectively. After that, it has been on a downward trend. It has been falling for two and a half years now. The income situation is shown in the following picture (screenshot from Tiantian Fund). Each red dot represents a regular investment.
Currently, the overall loss is about 17%.
I remember when I was working in a bank and attending fund training, the teacher said a sentence. In the fund industry, there is a phenomenon: It’s easier to sell but harder to manage, and easier to manage but harder to sell.
The following is a summary from Baidu Wenxin Yiyan. I’m not sure if the data is completely accurate, but the trend should be correct.
| Year | Total newly issued scale of equity funds (100 million yuan) |
|---|---|
| 2019 | 3.35 trillion |
| 2020 | 3.46 trillion |
| 2021 | 3.51 trillion |
| 2022 | 1.48 trillion |
| 2023 | 1.11 trillion |
Compared with previous years, the total newly issued scale of equity funds in 2023 has significantly declined. Compared with the peak periods in 2019 and 2020, the issuance scale in recent years has clearly dropped. Especially in 2022 and 2023, the newly issued scale has dropped to about 1.48 trillion yuan and 1.11 trillion yuan, far lower than the levels in previous years. This may reflect changes in the market environment and investors’ sentiment, as well as expectations for the future economic and stock market prospects. Nevertheless, with the continuous changes in the domestic economy and policies, the newly issued scale of equity funds may still fluctuate in the future.
It seems that now is the time of easier to manage but harder to sell. I don’t know when it will be reflected in the returns.
I started worrying about the entire market around October 2023 and hesitated whether to continue investing. I was mainly worried about two factors: war and the “lost 30 years”.
War here refers to the recovery of Taiwan. As a Chinese, from a national - emotional perspective, I support the recovery of Taiwan. However, from a personal investment perspective, I’m rather worried. Just look at the stock market trend of Russia after the Russia - Ukraine war.
The lost 30 years originally refers to the economic recession in Japan due to the bursting of the economic bubble in 1989. Even more than 30 years later, it still hasn’t returned to the level of that time. You can refer to Wikipedia for details. This year, there were many remarks suggesting that China might fall into a similar situation as Japan. I also looked up some information and was really worried at that time.
Now I’m not so worried anymore. First, the money I use for investment is a fixed part taken out from my monthly salary, and the proportion is not large. Even if there is a serious loss, it won’t affect my life. Second, I still believe that our government has the ability to handle these two issues of war and the “lost 30 years”. Let’s see what happens in 2024.
Some time ago, I learned that a classmate who started investing with me in 2019 cut his losses and cleared his positions. I don’t know if he cut losses in time or fell in the darkness before dawn. Only time can tell.
Buy when no one cares, and sell when everyone is enthusiastic.
Judging from various data, now is the “time when no one cares”, but I’m in a dilemma.
On the one hand, I hope this stage lasts a bit longer so that I can buy more and earn more in the future.
On the other hand, this stage is really torturous. The continuous decline makes me hope it will end soon.