Look at the current A shares, can't be happy. . .
After entering May, the market began to break 3,000, and now it is 2800 points, and the volume is also a reduction.
In addition to the impact of the recent large external factors, there has been more and more discussion about the A-share slang "Five Poor Sixs and Seven Turns Over".So, does A share really have the saying of "five poor"? Are we now in the "five poor"?
Backtesting history, the Shanghai stock index rose and fell in May
In the past 11 years (2008-2018), the small and medium-sized European stock index rose and fell in May.
1. In the past 11 years, there were 5 times in May and 6 times in decline, but the average value in the case of rising is 3.36%, and the average in the case of falling is -4.24%.It seems that the decline is indeed higher than the probability of rising, and the magnitude is also larger;
2, but,The closer to the current year, the more the Shanghai stock index rose in May, and the magnitude was even greater.
As mentioned above, in fact, looking at the past 11 years, we cannot fully conclude that the "five poor" will definitely emerge. The market is mostly changing. It is only the sense that we always feel that "history is always amazingly similar."
Then why is there a saying of "five poor"?
If you think about it, it is better to understand:
After entering April and May, the favorable factors for the birth of the spring market have subsided. After the end of the two sessions, the policy is in the off-season. The annual report, the quarterly report and economic data are released to bring about performance and economic verification pressure.
After the spring market, some sectors were at a high level, and there was also a callback demand, which aggravated the weakness of the second quarter.
This is not a small European summary point of view, this is the analysis given by the brokers, the small European is just moving over.
Apply to the market this year, after the fall of 2018,The valuation of the A-share market has been at a historically low level. At the beginning of the year, various policies, economic data and external environment continued to exceed expectations, which led to the emergence of a “bull market” in the market.The overall situation is in a general upward trend. The adjustment in the middle and late April indicates the overheating caused by the market rise. In this case, adjustment is a normal phenomenon. The effect of the recent “tariffs” on Sino-US trade negotiations has triggered the market sentiment.
"Five Poor" - A-share seasonal effect
The statement given by Essence Securities is that the occasional appearance of the A-share “five poor” actually belongs toSeasonal effect. And they also sorted out other similar seasonal effects in addition to the "five poor":
1,A-share indexIn 2/7/10 and November, the probability of rising is higher and the increase is higher;
2. The A-share index has a higher probability of falling in 1/5/6 and August, with a larger decline;
3. The spring market is an important feature of A-shares, with a high probability of occurrence each year;
4, A shares in the red October performance is obviously stronger, and often lasts until November;
5,gemMeansThe number was significantly stronger than the other indexes in 2/5/August, but was significantly weaker in December.
——Source: Essence Securities
"The Years Old Flowers Are Similar, Analysis of Seasonal Effects of A Shares"
So why is there a seasonal effect? The explanation given by Essence Securities is:The mood is dominated and the fundamentals are less affected.
Current situation in April and October
The above materials are not intended to be any legal documents. The fund manager does not guarantee that the fund will be profitable or guarantee the minimum income. Investors should carefully read the relevant fund contracts and prospectus and other legal documents. Past performance is not indicative of its future performance.