The A Share Market Risk Is Coming To An End.

To date, the A share market has fallen by nearly 40% of its previous peak.

At the same time, the two business balance of Shanghai and Shenzhen two cities also dropped sharply to the trillion integer pass.

It can be seen that the valuation risk of the market has also been well released.

Perhaps, the important areas in the 3000 point area are also basically in line with the demand for medium and long term funds.

A shares have fallen by nearly 40% compared with the previous peak, and the balance of business between Shanghai and Shenzhen two cities has dropped sharply to the trillion integer pass, and the valuation risk has been well released.

At the 3000 point, it is also basically consistent with the demand for medium and long term funds.

It has experienced a sharp fall in the last two months.

The overall valuation pressure of the market has also dropped sharply.

However, after the market valuation risk has been substantially released, the market has not stepped out of the gradual warming market, but it still shows a trend of continuing to bottom out, and many of the bottom hunters have been caught in a dilemma.

In fact, compared with the market data of the first two months, some of the indicators in the A share market have also been corrected.

Among them, in the Shanghai and Shenzhen two cities of the two financial balance scale, for example, in early June this year, the value was close to 2 trillion and 300 billion level.

After a number of "deleveraging" processes, the value dropped to the level of mid December last year.

As of August 31st, the scale of the two financial balances of the Shanghai and Shenzhen two cities was about 1 trillion and 55 billion 900 million yuan, which has fallen by more than one trillion yuan from the previous high.

Moreover, taking the valuation level of Shanghai and Shenzhen two cities as an example, in early June of this year, the market valuation pressure was huge, and the valuation level of related stocks reached thousands of times or even tens of thousands of times.

And after the recent two months of the bull market, many stock prices have dropped to last year's bull market.

What's more, its stock price has also reached a new low level in recent years.

Up to now, there are only 5 companies in the two cities, and the number of ultra low priced stocks below 5 yuan has increased to 100 or so.

The number of low priced stocks below 10 yuan has also increased to more than 800.

At the same time, the number of broken stocks in the market also increased significantly, and basically concentrated in the steel, banking and other fields.

Thus, compared with the market situation in the first two months, the current market average

And the overall valuation has shown signs of significant shrinkage.

For the time being, the number of listed companies with a dynamic P / E ratio of less than 10 times in the two cities has increased to about 70.

However, it may not be scientific to measure the current valuation level solely based on dynamic P / E and average p / E ratio.

In practice, investors can also refer to the median of P / E ratio to further enhance the overall accuracy of judgement.

Obviously, if we use the median price to earnings ratio to judge the current market valuation, we have different results.

Among them, for the time being, the valuation risk of the whole market still exists, and the goal of complete extrusion has not been achieved.

However, facing the current market

Polarization is also an important reference for investors to choose the direction of investment.

In fact, after a round of accelerated market, the investment advantages of some stocks that have already been squeezed out of water will always be highlighted again.

At the same time, for the blue chip stocks that are already undervalued, their valuation advantages will be further highlighted after the stock market has plummeted.

Therefore, for this type of stock, its risk release is at the end of the stage.

However, for some of the stocks with high valuation in the early days, although the initial share price has already encountered irrational trend, it does not mean that these stocks can be arbitrarily picked up.

Let's take an example. Suppose that a certain loss of junk stock is very bad, but it is caught in a bull market by relying on a hot concept.

During the period, the stock price increased from 2 yuan to 3 yuan to 100 yuan.

However, after a round of market downturn, although the stock price has shrunk by 60%, its price is still at a level of 3 or 40 yuan, and its basic situation is still unable to support such a high share price.

As a result, even during the period of this kind of stock rebound trend, still failed to reverse the long downward trend in the long run.

Therefore, I believe that for this type of high valuation stocks, investors still need to gradually adjust their positions in the rebound process, so it is not appropriate to blindly copy the bottom.

On the contrary, for some blue chips that have already squeezed water and have good fundamentals, they deserve to be absorbed in the long and medium term layout.