Just after the National Day holiday, the A-share market staged a horror for investors. After the market opened on October 8, the originally promising market suddenly took a sharp turn, and the index fell all the way from around 3,200 points. Even more alarming is the news that foreign capital is withdrawing from China's stock market on a large scale. What the hell is going on? What are foreign investors doing?
"Black Opening" after a long holiday
On the eve of the National Day, the A-share market is thriving. The Shanghai Composite Index broke through 3,200 points, hitting a new recent high. Major media are optimistic about the market outlook, believing that the market will continue to improve after the long holiday. But who would have thought that the situation after the market opened on the 8th was completely opposite.
As soon as the market opened, the index rushed higher and fell back. In the next few days, it continued to fall, spitting out all the gains before the holiday. Many shareholders were dumbfounded: What's going on? Could it be that something big happened during the holiday season?
In fact, there is no special bad news. What really spooked the market was a report on the movement of foreign investment.
Foreign capital clearance?! That's scary, isn't it?
On October 11, some media released a set of data: before the National Day, the position of foreign investors in A-shares has fallen to the lowest point in five years, only 6.8%. What's even worse is that after the holiday, foreign investors actually emptied all A-share long positions, and also significantly increased their short positions!
As soon as this news came out, it was simply a hornet's nest. Shareholders suddenly fryed:
"I'll just say, why did you suddenly fall so badly, it turned out that foreign capital was playing tricks!"
"It's too much, secretly clearing the warehouse while we are on vacation, isn't this a pit?"
"Foreign capital is here to cut leeks, and it is not credible at all!"
Indeed, this news sounds quite scary. But if you think about it, is it really that simple?
Is foreign capital really "shorting China"?
Don't jump to conclusions. Let's break it down:
It is true that foreign positions in A-shares are indeed declining. But from 6.8% to 0, that's too exaggerated, right? You must know that it is not an overnight matter for foreign capital to be completely withdrawn.
Adding to a short position is not the same as going short. It may be to hedge against risks, after all, the global economic situation is uncertain.
Foreign capital is not monolithic. The strategies of different institutions and funds are definitely different. There are those who sell, and naturally there are those who buy.
So, rather than saying that foreign investors are "shorting China", it is better to say that they are adjusting their investment strategies. This is normal, there is no need to make a fuss.
Don't treat foreign capital as a beast
To be honest, our attitude towards foreign capital is always very contradictory.
On the one hand, it is hoped that more foreign capital will come in and bring fresh water to the market. On the other hand, they are worried that foreign capital will manipulate the market because of its "wolf ambitions".
In fact, foreign capital is here to make money, not philanthropists, nor devils. Their investment decisions are nothing more than looking at China's economic situation, global economic environment, various policy factors, and so on.
Recently, the global economy has indeed been sluggish, the Federal Reserve is still raising interest rates, and the stock markets of various countries are not very calm. In this case, isn't it normal for foreign investors to adjust their positions in A-shares?
Instead of complaining, it is better to improve yourself
At the end of the day, it's normal for the stock market to go up and down. Instead of staring at the trend of foreign capital all day long, it is better to spend more time studying the company's fundamentals and improve your investment ability.
A-shares are not only played by foreign capital. Our own public funds, insurance funds, pensions, etc., which is not hundreds of billions or trillions? These are the mainstays of the market.
So don't take foreign investment too seriously. It's good that they're here, but there's no need to be too sad to leave. The key is that our own stock market should develop healthily, and that is the long-term solution.
In the final analysis, we lack confidence in ourselves. If A-shares are really attractive, why worry about no one coming to invest? Instead of staring at the faces of foreign capital all day long, it is better to think more about how to do your own things well.
The stock market is risky, and investors need to be cautious. Instead of suffering from gains and losses all day long, it is better to calm down and learn investment knowledge and improve your judgment ability. That's the real way to win.
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