Brothers and sisters, the bull market is full of significant shocks! New investors who just entered the market have deeply experienced this right from the start.

Today, ETFs related to the ChiNext and STAR Market once reached a 20CM drop, but this time it was downward.

Let's find the reasons for the decline, and I've found three points: First, short-term profit-taking and fund reshuffling. Second, the market's expectations for policy; the National Development and Reform Commission's press conference held on the 8th did not meet market expectations, and investors are looking forward to further stimulus measures. Third, the recent large-scale share reduction announcements from listed companies have led to a decline in market sentiment.

Seeing the big world right away, after noon today, the trading volume of East Money broke through 70 billion yuan, breaking the record of 69.99 billion yuan for a single stock's daily historical trading volume set by PetroChina on November 5, 2007!

Witnessing history, there is a bit of panic inside. In fact, there's nothing to it; bull markets often have sharp declines, and bear markets often have sharp rises.

On September 24, this round of the market started, which was urgent and fast. It was too late, there was no time at all to study individual stocks, and buying ETFs directly became the first choice for many investors to participate in this round of the market.

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Different from the past, this time the index is ahead of the vast majority of individual stocks, even outperforming the weighted stocks in the index. The 20CM ChiNext and STAR Market-related ETFs have become the main battlefield for funds.

Taking ChiNext ETF Tianhong (159977) and Double Innovation Leader ETF (159603) as examples, they have outperformed most ChiNext leading stocks in the recent continuous surge.

According to historical experience, at the beginning of the rise, index ETFs often have a larger increase than many individual stocks and actively managed equity funds, and the fluctuations are also larger. This is because index ETFs operate with high positions, and the proportion of ETF assets invested in the constituent stocks and alternative constituent stocks of the target index is not less than 90% of the net value of the fund's assets.

This characteristic of high-position operation also shows a large elasticity in the surge market for ETFs. For example, the bull market flag bearer Securities ETF (159841) has risen by 53.89% in this round, and Computer ETF (159998), Biomedical ETF (159859), Photovoltaic ETF (159857), Robot ETF (159770), and Electronic ETF (159997) have all risen by more than 40%. The specific increases are as follows:On one side, there is a surge, and on the other, there is a massive volume. This market trend can be considered unprecedented! ETFs have set a record for trading volume.

How strong were ETFs in this epic market trend? Let's look directly at the data: the total transaction volume of the top 20 ETFs yesterday exceeded that of the top 20 stocks. The transaction volume of equity ETFs for the whole day increased to 508.3 billion yuan, setting a historical record, with the single-day transaction volume being six times the average transaction volume of this year.

This should be a significant change in A-shares. In the past, everyone wanted to outperform the market and preferred to pick their own stocks, only to find out after a lot of effort that it was not as good as investing in index ETFs.

As the market becomes more mature, the acceptance of ETFs among investors is also increasing.

For example, many big players are also investing in ETFs, and private equity is becoming one of the important "buyers" of ETFs.

Bridgewater Associates has positioned itself in gold through ETFs, and the billion-dollar private equity firm Oriental Harbor has allocated globally through ETFs, while the ten-billion-dollar private equity firm Jinglin Assets has appeared in the top ten holders of the electronic ETF (159997).

In fact, in recent years, the variety of ETFs has become richer and richer. With the advantages of diversified investment, low fees, good liquidity, and convenient trading, ETFs have become an excellent investment tool favored by various funds.

Professional institutions buy ETFs mainly for several reasons:

1. Allocate some broad-based ETFs to achieve a balanced risk of overall asset allocation and diversification of the portfolio; 2. Purchase thematic ETFs to seize investment opportunities in industries and sectors, perceive market changes, and keep up with the market trend in a timely manner; 3. When the market trend rotates quickly, stock selection has little impact on returns. The key is the industry position, which can be achieved through the allocation of industry ETFs, and it can also effectively avoid stepping on individual stocks.For individual investors, compared to buying stocks and actively managed equity funds, ETFs are also a great tool:

1. ETFs have low fees. Compared to the management fees of actively managed equity funds that can reach 1.2%, the management fee rates for ETFs are generally between 0.15% and 0.5%.

2. ETFs are conducive to risk diversification. Buying a stock ETF is equivalent to quickly holding a basket of corresponding index constituent stocks, solving the problem of selecting individual stocks, avoiding the risk of individual stock "black swan" events, and the ETF's holdings are transparent and clear, so there is no need to worry about the style drift of the fund manager.

3. Participating in the market through ETFs can lower the threshold for a large number of retail investors. For example, the 500,000 threshold for the STAR Market and the 100,000 capital threshold for the ChiNext board, plus two years of trading experience.

New investors who opened accounts during the holiday officially entered the market today. However, due to permission restrictions, new investors cannot buy stocks on the ChiNext board and the STAR Market (requiring 2 years of stock age), and many new investors will choose to buy related index ETFs.

Investors without a securities account who want to invest in A-shares can also purchase OTC connected funds through channels such as Alipay. Search for Tianhong Fund on the Alipay APP and select the variety they want to invest in.

Today's trend made new investors a bit nervous. Teacher Dashao urgently called out: the pullback may have basically arrived.

He pointed out that the trading volume on October 9th obviously shrank, and the trading volume on the 8th may be the top of the short and medium term. Good stocks, blue-chip stocks, and leading stocks are preferable, and there are risks with overvalued stocks in five categories, and long-term funds are starting to enter the market.

Stock trading is about mentality. A good mentality is better than thousands of good medicines. If you really look long-term at an investment variety, don't panic when the market panics. After all, the decline will not reduce the shares you hold.

Big A rushed from 2689 to 3674 points in just 10 days. It's not a bad thing to take a break and pull back. Risks arise from increases, and slow investment is fast.