wavenovel Chapter 1191 [Essentially making money from information asymmetry]
Chapter 1191 [Essentially making money from information asymmetry]
Chapter 1191 [Essentially making money from information asymmetry]
Those who withdrew when the Xinzheng 50 Index was less than 2000 points seem to have made a lot of profits, and they are indeed so. However, if you look at it over a longer period of time, you may have missed out on more. It seems that the retail investors have taken over the market now, but if you look at it over a longer period of time, the profits will definitely not be small.
Especially some funds with a longer closed period. Some newly listed public funds related to the NXING 50 Index have a closed period ranging from three months to three years. For some investors who have purchased funds with a three-year closed period, they will have to wait until July 2019 to redeem them.
If the New Securities 50 Index experiences significant fluctuations at some point in the next three years, the vast majority of investors may redeem their shares out of panic, but it will be too late when they realize that they have sold off sharply.
However, if the three years are closed, the rules restricting the operation of investors will bring them greater benefits. Of course, this requires a prerequisite, which is to be established in a mature, complete and non-fraudulent market.
After the three-year closed period, this fund will be converted into an open-ended and freely redeemable state. Investors can choose to redeem or increase their holdings at any time. However, the concept of the long bull market of the New Securities 50 Index in the past three years must have been deeply rooted in the hearts of investors. In addition, with the accumulated huge profits, when investors see the actual profits in their investment accounts, they will be more convinced of the concepts of long-termism and value investing and become loyal supporters of value investing.
As long as investors are not in urgent need of money, even if the market experiences a short-term sharp drop, they will not be easily influenced by panic and follow the trend to redeem their funds. This will largely avoid the phenomenon of bank runs in the market and prevent the continued strengthening of vicious negative feedback.
Even at this time, if investors still have spare money, they may choose to increase their positions on dips due to the market crash. This will not only avoid the vicious negative feedback that causes the market to continue to plummet, but also better stabilize the market and reduce violent fluctuations. The whole situation is completely opposite to that of the main board next door.
The A-share and A-share main boards often see market crashes, panic intensifies, margin trading plummets and hits the forced liquidation line, further triggering a market crash, thus forming a vicious negative feedback loop. This situation will never happen in the SGX, but the probability of it happening is much lower than that in the main board market next door. After all, the stabilization fund is coming soon, which is also a powerful tool for stabilizing the market.
In fact, this wave of phased adjustments in mid-to-late July will bring more benefits than disadvantages to the SGX market and the SGX 50 Index.
The previous profit-taking funds made a profit and left, and the new funds took over. The index will have stronger support at a high level. If there is no turnover, the accumulated profits of the previous profit-taking funds will be too great, and they will crash the market without any scruples when they withdraw.
Anyway, the profits are huge, so even if they are cut in half, it is still a big profit. In order to lock in the profits, people will not care too much. The reflection in the market trend will definitely be drastic fluctuations, which may easily lead to a systemic crisis.
On the contrary, as long as turnover occurs, one group leaves and another group comes in, and the new funds that come in must want to make money before leaving, so there is support.
The departure of a group of people means that the selling pressure has been released once. The impact on the market will be completely different levels if the selling pressure is released once a year and released all at once after ten years of accumulation.
Fang Hong also does not want anyone to monopolize all the profits in the SGX market, as it will never last long if one person monopolizes the market.
During the long bull run of the NZD 50 Index, various funds can realize orderly relay, cash out and leave after making a profit for a period of time, and free up chips for newcomers to take over. Do not let one wave of people make all the money. It is healthy to continue this cycle.
As for those who want to default on their debts and buy at 50 points of the New Stock Exchange 1000 Index with the intention of selling when it rises to 3 points, Fang Hong still has plenty of ways to shake them off the market, and the stabilization fund can play a heavyweight role in this.
If you are unwilling to change your hands, then use the stabilization fund to push down the index so that your earnings are facing a drawdown. If you insist on holding on, then we will continue to push it down to see whether you will leave or not. If you still don’t leave, we can use the ultimate trick of "directional blasting" to take you back to the time before liberation and see whether you will leave or not.
In short, the Xinzheng 50 Index must maintain a healthy and reasonable turnover in order to achieve a real long bull market. Otherwise, if you buy at the bottom of 1000 points and want to sell at 3 points, how many fools will really be willing to take over your order? This is not called relaying, it is really taking over.
Fang Hong allows some funds to reap the profits from the main upward trend of the New Securities 50 Index at the ten-year level, but the scale of such funds can only account for a minority of the market. This is also in line with the objective law of the development of things. There will always be very good investors. If the scale is not large, there is no need to put in a lot of effort. After all, the gains will outweigh the losses.
……
It is just the beginning of August. On the first trading day of this month, the New Securities 8 Index hit the bottom of 50 points and without any delay, it directly and neatly ushered in a V-shaped rebound.
Because in the first half of the year, the public fund products issued and raised funds by major public fund institutions have completed fund raising and started to enter the SGX.
Investors have larger funds, and the influx of massive off-market incremental funds has driven the continued upward trend of the New Securities 50 Index. In just half a month, the New Securities 50 Index has returned to the 1800 point mark and is once again approaching its historical high.
Subsequently, the growth rate began to slow down, but the bullish trend was maintained throughout August, and the funds that had been standing guard at the previous 1900 points also continued to reduce losses.
At the same time, the main board index also strengthened. The Shanghai Composite Index broke through the previous high with a large positive line in mid-August and reached the 8-point integer mark.
The reason why the main board next door was able to take off at this time, from a funding perspective, was largely due to the help of the SGX, which allowed it to return to 3100 points, because during this time window a batch of funds from the SGX-themed hybrid funds issued by major public funds diverted into the main board.
As the name suggests, hybrid active funds have mixed holdings, and active funds mean that fund managers can decide what to buy. Therefore, the top ten holdings of these hybrid funds are all stocks from the Singapore Exchange, mixed with some stocks from the main board.
It is also because of this that incremental funds have entered the main board, offsetting the liquidity of a large number of investors who are constantly turning to the SGX.
However, as a result, the yields of those mixed funds have become much weaker, and they may even not outperform the New Securities 50 Index. Fortunately, the absolute returns are not low, so investors do not have such big objections. In fact, investors are not that greedy, and many people are even satisfied with a return of more than ten points a year.
Only some investors who always pay attention to market trends will scold fund managers for being incompetent and unable to outperform the SSE 50 Index.
There is a reason why these mixed funds can be issued. In fact, most of the investors who subscribe to them do not pay attention to the market. What is also not noticed is that the source of funds for these mixed funds actually includes financial products that some banks "recommend" depositors to buy. Some banks actually cooperate with public fund institutions, and the banks help sell fund products.
Then these financial products are used to buy funds, and this type of funds actually accounts for a not low proportion.
Many customers bought financial products through bank recommendations, and they didn’t even know that their funds were transferred several times by middlemen before entering the stock market to buy stocks. Such customers have no background check capabilities at all, and it is impossible for them to conduct due diligence and penetrate the underlying asset structure of their financial products. They don’t even have enough knowledge, but after seeing the considerable returns, they will even make additional investments. Some of them may be recommended by friends and relatives.
This is why hybrid funds can be issued and their scale is not small.
If a true senior investor sees that your active fund cannot even outperform the Xinzheng 50 Index, he will be crazy and will subscribe for it. Wouldn’t it be better to just buy the Xinzheng 50 ETF OTC linked fund? Wouldn’t it be better to just open an account and buy the Xinzheng 50 ETF?
From this we can see that the money made in the financial market is at the cognitive level, which is essentially making money from the information gap between people.
……
(End of this chapter)