Is 2025 the best year for stock investment? Before we begin, we need to understand some basic knowledge about stock investment.
The ultimate goal of stock investment is to generate returns. Stock returns are highly uncertain, as investors can only rely on forecasts of the companies they invest in and their stock price fluctuations, which are inevitably subject to error. However, to strengthen stock investment management, investors must still calculate and assess their investment returns.
The stock market we face in 2025 is arguably the best it has ever been for the A-share market
This is because the A-share market has never been so highly regarded. In the second half of 2024, the A-share market launched a so-called "9.24" bull run. In just 10 trading days, the Shanghai Composite Index surged nearly 1,000 points. This was the first bull run in the stock market's more than 30-year history, following the "5.19" bull run, the stock market reform bull market, and the surge 10 years ago. The two main drivers of the "9.24" bull run were new tools created by the central bank: the swap facility and the repo facility. At the end of the year, a high-level meeting adopted a new theme: stabilizing the real estate and stock markets. This elevation of the stock market to such a high level is unprecedented in the history of the A-share market.
The most important factor in evaluating the stock market is fundamentals, and the market fundamentals in 2025 are arguably the best they have ever been. The launch of the "9.24" bull market confirms this call for stabilizing the stock market. Therefore, it can be said that the future direction of the A-share market is strongly correlated with the development of my country's economy. The word "stabilize" implies providing a floor for the market, ensuring that it can only move upward, not backward. An upward trend aligns with the requirements of economic development and meets the expectations of management; conversely, a backward move is unacceptable and would be a dead end.
Although "stabilizing the stock market" is merely four words, it is believed that a series of supporting policy measures will be introduced. As for the swap facilities and repurchase loans that have already been introduced, only the first tranche has been launched as of the end of 2024, and the quota for the first tranche has not yet been fully utilized. Their impact on the market will undergo a process of quantitative and qualitative change. It can be expected that in 2025, financial support for the stock market will increase further. This fundamental support will be the driving force for the market to continue to strengthen and perform well.