Profitable Sector Rotation: Maximizing Returns with Smart Timing | Moomoo Research

Recently, China's capital market has seen a strong uptrend. After experiencing a major bear market, funds from outside the market have been pouring in. It is anticipated that after the first wave of widespread increases, capital will begin to rotate among different sectors.
During market booms, it's essential to stay cool-headed and patient. With abundant capital, nearly every sector has a chance to climb. Here's the key:
1. Holding Strategy: Stick with your chosen sectors until their valuations hit bubble levels and growth falters, then consider selling to secure your gains.
2. Sector Rotation: Or, you can optimize your portfolio by shifting from sectors with lower valuations to those that are even cheaper, aiming to maximize profits.
3. Avoid Chasing Highs: The worst move is to sell assets that haven't risen yet to chase those that have already soared, which often comes with significant risk.
A safer alternative is to seek out assets that are reasonably valued and have strong fundamentals, then sell them at the right time as their prices rise. When there are no more options, the market might be nearing its peak.
If you opt for sector rotation, consider:
Event-Driven Opportunities: Keep an eye on positive news that can capture market attention and position yourself ahead of time.
Sell High: Be decisive in selling when stock prices peak to lock in profits.
If you make a misstep, cut your losses quickly; there are plenty of faster sharks in the water.