Recent market activity has cooled compared to the previous period, yet the overall trend continues to demonstrate considerable resilience. Following the conclusion of the year-end rally, the market is now beginning to build momentum for a "spring offensive."
Typically, January marks a peak period for credit extension, with volumes reaching approximately 4 trillion yuan. This influx of credit means a portion of funds finds its way into the capital markets through various channels, acting as incremental capital that helps fuel the spring offensive. Furthermore, the first quarter of each year is an "information vacuum" for listed company earnings reports. Aside from a few companies issuing profit warnings or positive forecasts, the majority of listed firms do not release formal financial statements, providing a relatively favorable "time window" for the market rally to deepen.
During last year's Spring Festival, stock and fund investments became hot topics of conversation among relatives and friends, with inquiries about "last year's investment returns" almost becoming a staple of dinner table discussions. Some investors tend to exaggerate their gains and downplay their losses when sharing experiences, which can further amplify the "wealth effect" of the stock market, attracting more outside capital and bringing potential new investors to the market after the holiday.
Currently, a slow and long-term bull market has been preliminarily established, with investor confidence gradually improving and skepticism about the bull run diminishing. A growing number of participants are beginning to accept and believe that this is a sustained bull market, potentially lasting from 3-5 years to as long as 5-10 years, rather than a rapid, frenzied surge—a development widely anticipated by investors. This aligns with recent policy guidance aimed at fostering steady market development. Against this backdrop, investors should value this market cycle, persistently study value investment principles, identify superior sectors, high-quality companies, and excellent funds that genuinely benefit from economic restructuring, and strive to capitalize on the opportunities presented.
It is reported that an estimated 50 trillion yuan in bank time deposits are set to mature in 2026. Faced with these maturing funds, investors confront a significant choice: either renew the deposits at sharply lower interest rates, potentially around 1% compared to the previous 3%, or invest in bonds, stocks, or funds. Investors with different risk appetites will make varied choices: those with lower risk tolerance may prefer deposits, bank wealth management products, or fixed-income investments like bonds and bond funds; meanwhile, investors with higher risk tolerance, anticipating stock market gains, are likely to allocate to stocks or equity funds. This signals an accelerated shift of household savings into the capital markets, bringing incremental funds to the stock market. The pace of this transfer is expected to quicken further in 2026.
Observing market trends, 2025 was almost entirely dominated by technology stocks, while traditional sectors languished. As China's economy undergoes transformation, the outlook appears quite pessimistic if one focuses solely on traditional industries; conversely, the emerging industry sector presents a vibrant and thriving picture. The Tang Dynasty poet Liu Yuxi's line, "A thousand sails pass by the shipwreck; ten thousand saplings flourish beyond the withered tree," aptly describes the current situation. Traditional industries, particularly those tied to real estate, resemble the "shipwreck" and "withered tree," struggling to survive, while emerging sectors like AI, chips, semiconductors, and computing power attract substantial capital inflows, representing the "thousand sails" and "flourishing saplings." This fundamental divergence creates vastly different performances in the capital markets, where high-quality companies with strong earnings will ultimately reflect their true value.
Looking ahead to 2026, the market rally is expected to deepen, with more sectors likely to experience rotational gains. Some traditional sectors, humorously dubbed "old guard stocks" in 2025, may see improved performance in 2026. After prolonged adjustments, share prices for many companies in these sectors are at historical lows, valuations are depressed, and they often include industry leaders that still maintain relatively stable profitability and market positions. Newly entering capital will face a decision: continue chasing tech stocks that have seen significant short-term gains but may lack solid earnings support, or pivot to undervalued, traditional blue-chip stocks that have yet to perform. Different types of capital will undoubtedly make different choices, but it is anticipated that more sectors will participate in 2026, forming a healthy rotational pattern.
Recently, U.S. financial markets experienced a simultaneous decline in stocks, bonds, and the dollar exchange rate—a "triple kill" scenario. While this may be a short-term trend, it serves as a cautionary signal. The Trump administration's numerous controversial policies have severely disrupted international economic and political order, leading to deep-seated concerns among investors about the credibility of the U.S. dollar, manifesting directly in the synchronized drop of the dollar, U.S. Treasuries, and U.S. stocks. As market risk aversion rises, the international gold price has broken through $4,800 per ounce, approaching the first target price of $5,000 per ounce proposed by Mr. Yang Delong over the past two years. In the long run, international gold prices breaking through $10,000 per ounce is merely a matter of time. The strong rally in gold prices实质上反映了投资者对美元信任度的下降。
In the "Top Ten Predictions for 2026" released by Mr. Yang Delong at the end of last year, he clearly indicated that the U.S. stock market might face the risk of peaking and declining in 2026. It is undeniable that the current AI technological revolution in the U.S. has indeed yielded many outstanding achievements and great companies. However, after more than a decade of gains, valuations in related fields are beginning to show signs of froth. Therefore, volatility in the U.S. stock market is expected to increase in 2026, with potential corrections possibly exceeding market expectations. However, a sharp decline akin to the bursting of the first U.S. tech internet bubble is unlikely; instead, a pattern of volatile adjustment is more probable.
The differing market landscapes in 2026 will create varied investment opportunities. It is anticipated that A-shares will overall outperform Hong Kong stocks, which in turn are expected to perform better than U.S. stocks. As domestic real estate investment opportunities diminish, many residents will likely turn to the capital markets in search of new opportunities, forming an important foundation for A-shares to potentially usher in a "golden decade." It is hoped that the majority of investors can seize the opportunities presented by this slow and long-term bull market to achieve steady growth and a significant turnaround in their personal wealth.
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