Riding the Waves: Seeking Investment Opportunities in the Volatile Chinese Asset Market | Moomoo Research

In today's China, amidst the turbulence in the asset market, we are witnessing an increase in the resilience of various asset classes. High-yield assets have shown a steady upward trend despite significant market fluctuations. In such a market environment, while uncertainty abounds, it simultaneously provides abundant opportunities for those exceptional traders who dare to ride the waves.

Due to the high uncertainty inherent in the market, we will not recommend specific directions or targets but will provide more options to facilitate decision-making for trading.

If you believe your judgments are logical and data-driven, and you can successfully perceive human behavior and trade based on behavioral finance principles, then swing trading with strategies such as buying high and selling low can be considered an alternative strategy.

For example, the Hang Seng Tech ETF (03032) or the China Concept Internet ETF (KWEB) allows participation in the volatility of Chinese tech stocks listed in Hong Kong and the U.S. These ETFs not only provide convenient investment channels but also effectively diversify the risks associated with individual stocks, preventing total losses due to poor stock selection. Naturally, this means you may miss out on capturing the strongest elastic moves. It is evident that these types of assets exhibit significant elasticity (the chart below compares the elasticity of the Hang Seng Tech Index with the Hang Seng Index; red represents the Hang Seng Tech Index, and purple represents the Hang Seng Index).

For investors who prefer high volatility and have a higher risk appetite, the 3x Long FTSE China ETF (YINN) and the 3x Short FTSE China ETF (YANG) offer amplified market participation opportunities, but they come with extreme volatility; it is crucial to set profit-taking and stop-loss strategies and to avoid getting overly excited.

Another strategy is to take profits at market peaks and shift towards assets that can provide stable returns. For instance, the Futu platform has a high-dividend ETF concept section, which offers many options. These types of stocks usually possess strong financial stability and exhibit strong defensive and anti-drawdown capabilities during market instability. Historically, they tend to decline more gently but also rise more slowly (the chart below compares high-dividend ETFs with the Hang Seng Index; red represents high-dividend ETFs, and purple represents the Hang Seng Index).

Moreover, bond assets are also worth considering, especially highly rated corporate bonds and government bonds. These assets typically provide relatively stable returns and preservation of value during periods of economic uncertainty, although the risk lies in rising interest rates. This approach allows for locking in profits at market peaks while also securing a stable cash flow during market fluctuations.

Additionally, gold in the global market is also a way to diversify. Trading gold on-exchange incurs lower fees, such as through the SPDR Gold ETF or Value Gold (03081). We have historical articles introducing these options.

Furthermore, cash management products offer a low-risk choice, usually providing higher returns than ordinary savings accounts while maintaining liquidity.

Therefore, during times of high market volatility, we need to remain rational amidst chaos and clarify value amidst panic. In a high-volatility market like Hong Kong stocks, filled with income-generating stocks, we can continuously seize trading opportunities and prepare ourselves with more "golden geese."