Preface
Recently, the U.S. stock market has been in the spotlight of global investors. With the exception of technology stocks, almost all sectors have fallen to varying degrees, which is a big surprise. In this wave of decline, the top 10 companies by market capitalization have bucked the trend, resulting in an unprecedented level of concentration in the entire market. This phenomenon has attracted a lot of attention from analysts and investors, and has also sparked heated discussions about the future direction of the US stock market.
First, the U.S. stock market fell sharply again
In recent times, the performance of the US stock market can be described as "ups and downs". Driven by technology stocks in particular, the S&P 500 hit a record high, which brought a lot of surprises to investors. The good times did not last long, and then the U.S. stock market ushered in a wave of collective decline, and almost all sectors were affected, and there were varying degrees of correction.
In this falling market, although technology stocks have also fallen, the decline is relatively insignificant, and they still maintain a certain degree of resilience. In addition to technology stocks, other sectors have fallen by a relatively large margin, especially cyclical stocks such as energy and finance, which have plummeted by nearly 20%, which has brought a lot of impact to the entire market.
According to market analysts, the collective decline in the US stock market this time is not accidental, but is influenced by many factors. As the U.S. economy gradually recovered, the market's inflation worries began to rise, which also led to the Fed's interest rate hike expectations earlier, which directly weighed on the performance of the stock market. The uncertainty of the global epidemic still exists, and some countries have seen a rebound of the epidemic, which has brought certain obstacles to the global economic recovery and also brought certain psychological pressure to stock market investors.
In addition, geopolitical uncertainties have also brought a certain negative impact on the stock market, such as the tension between China and the United States, the deterioration of the situation in Ukraine, etc., which have become the focus of market attention, and also brought a certain degree of risk aversion to investors, resulting in a certain degree of withdrawal of stock market funds.
Second, the Russell index was rebalanced, and the concentration of market capitalization reached a record high
In the context of the overall decline in the U.S. stock market, the performance of leading technology stocks has also shown certain signs of stagflation, and even some leading technology companies have seen a significant decline, such as Nvidia, whose market value once evaporated by $440 billion, which has brought a certain psychological impact to investors.
In this wave of decline, the top 10 companies by market capitalization have risen against the trend, especially Apple, whose market value once exceeded $2.5 trillion, becoming the world's most valuable company, which has directly led to the concentration of market value in the U.S. stock market to an unprecedented height.
According to the latest data, in the rebalancing of the Russell 1000 and Russell 2000 indexes, the weight of the top 10 companies has reached a record high of 34.3%, while at the peak of the Internet bubble in 2000, this data was only 18.5%.
3. Analysts began to be bearish on U.S. stocks in the second half of the year
In the face of the current performance of the U.S. stock market and the rising concentration of market capitalization, more and more analysts have begun to worry about the trend of the U.S. stock market in the second half of the year, and even began to throw out bearish forecasts.
According to people familiar with the matter, some well-known institutional investors have begun to adjust their portfolios, significantly reducing their holdings of related assets in the U.S. stock market, and instead increasing the allocation of some safe-haven assets, such as gold and bonds, and they are very cautious about the future trend of the U.S. stock market.
Some well-known investment banking institutions have also published research reports, the second half of the U.S. stock market trend predictions, such as Goldman Sachs, Morgan Stanley, etc., they believe that with the gradual recovery of the U.S. economy, inflationary pressure will continue to increase, which will inevitably bring a certain impact on the U.S. stock market, the S&P 500 index is expected to fall by 23%, and may even usher in a wave of relatively large adjustments.
4. How to deal with changes in the stock market?
In the face of the uncertainty of the U.S. stock market and analysts' bearish predictions for the trend of the U.S. stock market in the second half of the year, how should ordinary investors respond to the changes in the stock market?
Investors should have a clear understanding of the risks of the market, the current concentration of market value in the US stock market has reached an unprecedented height, which has brought great uncertainty to the entire market, once there are some unexpected negative factors, it is likely to bring a relatively large adjustment to the stock market, investors should be psychologically prepared for this.
Investors should reasonably allocate different assets according to their own risk appetite and investment objectives to achieve effective risk diversification, such as appropriately increasing the allocation of some defensive sectors, such as pharmaceuticals, consumption, etc., to reduce the volatility risk of the entire portfolio.
Investors should also have a choice when investing in individual stocks, not blindly chasing some popular concept stocks, but should conduct a comprehensive analysis from multiple perspectives such as the company's fundamentals and the development trend of the industry, and choose those stocks with good growth and valuation advantages to invest, so as to achieve stable growth in long-term investment returns.
Investors in the pursuit of high returns should also reasonably control the risk of investment, can not because of a moment of speculation, and excessive leverage operation, once the market has a relatively large fluctuations, it is likely to bring huge losses to investors, should maintain rational investment thinking, adhere to the concept of value investment, steady layout, long-term holding, to achieve steady growth of wealth.
epilogue
At present, the U.S. stock market is indeed facing many uncertainties, investors must keep a clear head when making investment decisions, can not be swayed by the market's emotions, should be based on their own judgment of the economy and industry, as well as the company's fundamentals of in-depth analysis, make rational investment decisions, grasp the rhythm and timing of investment, to achieve the goal of long-term stable returns.
We should also pay close attention to the impact of the global economic situation and various events on the stock market, adjust our investment strategies in a timely manner, do a good job in risk prevention and control, and believe that in the future investment market, only by maintaining a cautious and rational attitude can we stand out in the fierce market competition and win sustained and stable investment returns.
It is also hoped that the majority of investors can actively participate in the investment of the stock market, learn from each other, grow together, discuss the strategies and skills of stock market investment, and believe that through the joint efforts of everyone, we will be able to obtain satisfactory returns in the investment market and realize the beautiful dream of wealth freedom.